Tag Archives: Return on Capital Employed

Environmental Responsibility Reporting and Financial Performance of Quoted Oil and Gas Companies in Nigeria (Published)

This study examined the relationship between environmental responsibility reporting and financial performance of quoted oil and gas companies in Nigeria. The study used secondary data obtained from the annual reports of 13 oil and gas companies quoted on the floor of the Nigeria Stock Exchange (NSE) for the years 2012- 2017. The study adopted the ordinary least square (OLS) regression method as the basic technique of data analysis. The study found significant positive relationship between financial performance and environmental responsibility reporting in the oil and gas sector of Nigeria. However, the findings of the study indicate that environmental responsibility reporting in Nigeria is still developing and that organizations operating in the oil and gas sector report very little information about the impact of their operations on the environment. This finding is not quite surprising as most multinational oil and gas companies are not quoted on the NSE, as such were not included in the study. The study recommended, amongst others, that the relevant authorities in the country formulate regulatory policies for the oil and gas sector organizations to abide by in order to include more information on environmental responsibility practices in their annual reports.

Keywords: Assets Turnover., Environmental Responsibility Reporting, Financial Performance, Return on Capital Employed

Working Capital Management and Financial Performance: Evidence from Manufacturing Companies in Nigeria (Published)

The study examines the impact of working capital management on financial performance of manufacturing companies in Nigeria. The study employed multiple regressions in analyzing the data sourced from the published financial statement of the firms under the study. A significant outcome of the study is that Average Payment Period and Average Collection Period impacts on both Earnings per share and Return on capital employed. The implication is that efficient management of working capital will improve the financial performance of the manufacturing firms, hence the study recommends that professionals should be hired by these firm to ensure proper management of stock to avoid stock out. Conclusively, the study has shown that good management of working capital will keep manufacturing firms a float.

Keywords: Average Collection Period, Average Payment Period, Earnings per share, Return on Capital Employed

The Effect of Dividend Payout on Performance Evaluation: Evidence of Quoted Cement Companies in Nigeria (Published)

The issue of dividend payout is a very important matter in the current business environment and more especially on the performance evaluation of firms’. The dividend payment decisions of firms are the primary element of any corporate policy which is basically the benefit of shareholders in return for investing their money in the organization. The successful selection and use of appropriate dividend policy is one of the key elements of the firm’s performance evaluation. Hence, proper care and attention need to be given when such decision is taken. The purpose of this paper is to investigate the effect of dividend payout on performance evaluation of quoted cement companies in Nigeria over the past twelve (12) years period from 2003 to 2014. The researcher employed four (4) variables for the analyses such as: Dividend Payout Ratio (DPR); Return on Capital Employed (ROCE); Return on Assets (ROA) and Return on Equity (ROE). Performance evaluation as dependent variable is represented by Return on Capital Employed (ROCE); Return on Assets (ROA) and Return on Equity (ROE) while Dividend Payout stands as Dividend Payout Ratio (DPR) for independent variable. Secondary data were obtained from the financial statements (Statement of Comprehensive income and Statement of Financial Position) of the selected quoted cement companies in Nigeria on Nigerian Stock Exchange. The model specification for the analysis of data is ordinary least squares techniques applied as panel estimation while descriptive research method and simple linear regression for the analyses. The researchers’ empirical results suggest that dividend payout ratio (DPR) has positive relationship with all the dependent variables (ROCE, ROA and ROE) used for this study; that dividend payout ratio (DPR) has statistically significant with Return on Capital Employed (ROCE) and Return on Asset (ROA) while DPR has statistically insignificant with Return on Equity (ROE) of quoted cement companies in Nigeria and that R2 of all the dependent variables (Return on Capital Employed; Return on Assets and Return on Equity) used for this study were affected by other variables outside our model. It further revealed that dividend payout ratio (DPR) has statistically effect on Return on Capital Employed (ROCE) and Return on Assets (ROA) of quoted cement companies in Nigeria while DPR has no statistically effect on Return on Equity (ROE) of quoted cement companies in Nigeria. Based on this, we recommend that management should improve on their Return on Assets (ROA) and Return on Equity (ROE) as they are of great important in the valuation of performance evaluation of quoted cement companies in Nigeria; adopt optimal dividend policy that would better the lots of shareholders both in the short-run and long-run; devote adequate time in designing a dividend policy that will enhance firm’s performance and shareholder value and adopted good dividend payout policies in order to reduce agency cost and maximise the value of the company and attract more investors.

Keywords: Dividend Payout Ratio, Return on Assets, Return on Capital Employed, Return on Equity, Spss and Dividend Policy

Assessing the Impact of Liquidity and Profitability Ratios on Growth of Profits in Pharmaceutical Firms in Nigeri (Published)

This paper assesses the impact of liquidity and profitability ratios on growth of profits in Pharmaceutical firms in Nigeria. Eight ratios: acid test, current ratio, net working Capital. Return on assets, returns on capital employed, returns on equity, gross profit ratio and net profit ratio were regressed against the dependent variable growth of profit. Haussmann test was conducted to choose between Fixed Effect and Random Effects model. Results justified the use of Fixed Effect model. Test results indicate significant contributions of all the variables to profit growth of pharmaceutical companies in Nigeria implying that continued improvement in the variables can lead to increases in growth of profit by the Pharmaceutical firms.

Keywords: Growth of Profit, Liquidity, Profitability, Return on Assets, Return on Capital Employed, Return on Equity, Working capital.