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Effect of financial ratios on shareholders wealth in Nigerian manufacturing firms

Nwaduche Ohaju, Harrison (2020) Effect of financial ratios on shareholders wealth in Nigerian manufacturing firms. Masters thesis, Dublin, National College of Ireland.

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Abstract

The study appraised the effect of financial ratios on shareholders wealth in Nigerian manufacturing firms. The objectives formulated to guide the study were: investigate the effect of current ratio on total equity of Nigerian manufacturing firms; examine the effect of debt equity ratio on total equity of Nigerian manufacturing firms; ascertain how return on assets affects total equity of Nigerian manufacturing firms and determine the extent to which assets turnover affects total equity of Nigerian manufacturing firms. Quantitative design was adopted to achieve the objectives of the study while the scope covered ten (10) quoted consumer goods companies in Nigeria being Cadbury Nigeria Plc, Champion Breweries Plc, Dangote Flour Mill Plc, Dangote Sugar Plc, Fidson Nigeria Plc, Guinness Nigeria Plc, International Breweries Plc, Nigeria Breweries Plc, Nestle Nigeria Plc and Northern Nigeria Flour Mill Plc. Random effect panel regression model was used as the analytical technique. It was discovered that current ratio and debt equity ratio does not have significant effect on total equity of Nigerian manufacturing firms while return on assets and assets turnover have significant effect on total equity of Nigerian manufacturing firms. The study therefore recommended that the companies under study should either delay any capital purchases that would require any cash payments or sell any capital assets that are not generating a return to the business and using the cash to reduce current debt. They should improve on their debt to equity ratio by increasing sales or reducing costs in order to increase profitability. The companies under study should increase revenues without increasing assets cost through improved customer service delivery or by exploring new market segments and also computerize inventory and order systems in order to improve sales further due to the fact that the higher the asset turnover ratio, the more efficient a company is at generating revenue from its assets.

Item Type: Thesis (Masters)
Subjects: H Social Sciences > HD Industries. Land use. Labor > Specific Industries > Manufacturing Industry
H Social Sciences > HG Finance > Share Ownership
Divisions: School of Business > Master of Science in Finance
Depositing User: Dan English
Date Deposited: 16 Feb 2021 10:10
Last Modified: 16 Feb 2021 10:10
URI: http://norma.ncirl.ie/id/eprint/4767

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