What are the Determinants of Working Capital Requirements of Nigerian Firms?

The purpose of this paper is to examine the determinants of working capital requirements of thirty non-financial firms listed on the Nigerian Stock Exchange between 2004 and 2011. Panel data methodology was employed and Ordinary Least Squares (OLS) used as estimation technique. The Working capital requirement (firm’s net working capital deflated by total assets) was used as dependent variable. Regression results reveal that five explanatory variables- firm’s leverage, size, industry classification, return on asset and operating cycle are significant factors that determine the firms’ working capital requirements for the period under study. The outcome of this study supports the findings of some previous studies and is also consistent with financial theory. Keywords: Working Capital Requirements, ROA, Leverage, Size, Pecking Order, Nigeria.

Determinants of capital structure: A study of Nigerian quoted companies

This paper examines the determinants of corporate capital structure of thirty-five firms listed on the Nigerian Stock Exchange between 2006 and 2012. Panel data methodology was employed and pooled Ordinary Least Squares was (OLS) used to estimate the coefficients of six firm-specific determinants. Results reveal that the three leverage ratios (Total Leverage Ratio, Long-Term Leverage Ratio and Short-Term Leverage Ratio) are negatively and significantly related with profitability. Firm size and asset tangibility are however, positively and significantly related with leverage proxies. The outcome of the study shows that Nigerian firms rely heavily on the use of retained earnings (internal source) and where funds raised are insufficient, they then seek for external source. This is in line with financial theory and provides evidence in support of Pecking Order Theory. Key Words: Capital structure, Leverage, Pecking order, Static trade off, Nigeri

Asset Liability Management and Performance of Listed Deposit Money Banks in Nigeria

The study examines the impact of Asset Liability Management (ALM) on financial performance of deposit money banks in Nigeria using time series annual data from 2005-2018. Data on asset liability management was proxied with loan and advance, non-performing loan, demand deposit and borrowing while performance was proxied with return on asset and return on investment. Ex-post facto research design was used for the study. Data from audited annual reports of fourteen listed deposit money banks were used and the data were analyzed using panel data regression analysis. The study found that asset liability management exerts both positive and negative effect on return on asset and return on investment of listed deposit money banks in Nigeria. It further revealed that loan and advance and bank size have positive effect on return on asset while, non-performing loan exhibit negative effect on return on asset of deposit money banks in Nigeria. The study also found that demand deposit, borrowing and bank size exerts positive effect on return on investment of deposit money banks while, increase in bank size exhibits negative effect on return on investment of deposit money banks in Nigeria. The study concludes that adequate attention must be placed on loan and advance, non-performing loan, demand deposit and borrowings of deposit money banks in Nigeria to facilitate and guarantee better asset liability management. The study therefore recommends that a comprehensive Asset Liability Management policy framework should be put in place by every deposit money banks which should be adequately driven by a very dynamic and proactive asset liability management committee (ALCO) constituted by the board with specific roles of regularly probing the appropriate mix of assets and liabilities that maximizes banks profitability so as to consistently enhance performance and create value for the shareholders