The Impact of Market Share on Deposit Money Banks’ Profitability in Nigeria

The main objective of this paper is to empirically assess the impact of market share on Deposit Money Banks’ profitability in Nigeria, taking a case study of five selected banks. The theoretical underpinning highlighted the Relative Market Power (RMP) Hypotheses. The empirical analysis covered the period from 1981 to 2011. The data for the study were obtained from secondary sources including the annual reports and financial statements of the selected banks and Central Bank of Nigeria (CBN) statistical bulletin. The study adopted the Engle and Granger two steps procedure in co-integration. The study revealed that market share played an important role in explaining the banks Return on Assets (ROA) which is a measure of banks’ profitability. The strong, positive and significant relationship between market share and banks’ profitability suggest that banks’ profit margins increase more with market share. It was recommended that banks should increase their market share by rendering more attractive services including offering attractive loans and deposit rates. Also, Deposit Money Banks that are not doing very well in terms of profitability because of their small market share can merge together if they wish in order to benefit from the advantages of economies of scale thereby widening their profit margins. Keywords: Market Share, Banks’ Profitability, Return on Assets (ROA), Deposit Money Bank

The Impact of Capital Adequacy on Deposit Money Banks’ Profitability in Nigeria

The main objective of this paper is to empirically assess the impact of capital adequacy on Deposit Money Banks’ profitability in Nigeria, taking a case study of five selected banks. The empirical analysis covered the period from 1981 to 2011. The data for the study were obtained from secondary sources including the annual reports and financial statements of the selected banks and Central Bank of Nigeria (CBN) statistical bulletin. The study adopted the Engle and Granger two steps procedure in co-integration. The study revealed that capital adequacy plays an important role in explaining banks Returns On Assets (ROA) which is a measure of banks’ profitability. The positive and significant relationship between capital adequacy and banks’ profitability suggest that banks with more equity capital are perceived to have more safety and such advantage can be translated into higher profitability. The higher the capital ratio, the more profitable a bank will be. Based on the findings, It was recommended that there should be a constant review of minimum capital requirement of deposit money banks in Nigeria to the optimal level. Also Nigeria banks should be well capitalized to enable them enjoy assess to cheaper sources of funds with subsequent improvements in profit levels; this would go a long way to help the public maintain confidence in the banks and also accommodate the credit needs of customers. Keywords: Capital Adequacy, Banks’ Profitability, Return on Assets (ROA), Deposit Money Banks, Equity to Total Assets Ratio (EQTA

The Development of Environmental Accounting and Disclosure Practices of Manufacturing Companies in Nigeria

The study is an investigation into the development of environmental accounting and disclosure practices of manufacturing companies in Nigeria with emphasis on United Cement Company of Nigeria (UNICEM) Plc, Niger Mills Nigeria Plc and PAMOL Nigeria Ltd. The data for the study were collected through questionnaires administered and the annual reports obtained directly from the companies under study. The study employed independent t-test and Analysis of Variance (ANOVA) in the test of hypotheses. The findings of the study were that manufacturing companies do not charge environmental expenditures independently of other expenditures and the level of environmental cost awareness in manufacturing companies in Nigeria are not high. Based on the findings, it was recommended among other things that environmental expenditures should be charged separately of other expenditures, this will give room for more accountability on the companies' impact on the environment. More so, the level of awareness of environmental cost should be increased. This can be achieved by the ministry of environment liaising with relevant accounting bodies calling for training and retraining of accounting staff on environmental issues and how to track externality cost. Keywords: environmental accounting, environmental expenditure, disclosure practices, environmental cost awareness

Corporate Governance and Leverage Implications on Firms’ Profitability, Cash Flows and Value in Nigeria

The paper examines the implications of Corporate Governance and leverage on firm profitability (ROA), value (MPS) and cash flows (FCF). The study utilized the agency, stewardship and free cash flow theories. The correlation research design was employed and data collected from ten (10) listed manufacturing firms in Nigeria between the period 2009-2018. The data was analysed for descriptive and correlation properties, with the research hypotheses tested through regression analysis. The results of the study indicates that independent boards have significant negative influence on debt usage, board size does not have a significant effect on debt capital, CEO duality positively impacts the usage of debt financing. The results also indicate that independent boards (BIND) have significant impact on ROA, FCF and MPS, BSIZE is found to exert no statistically significant impact on the financial performance variables, CEO duality negatively impacts both FCF and MPS of the sampled manufacturing firms in Nigeria. Furthermore, the impact of DEBT on ROA and FCF are found to be negative, with the negative effect on ROA being statistically insignificant at the 0.05 level (-0.015, (0.6846)), and the negative effect on FCF being statistically significant at the 0.05 alpha level. The research concludes that the research therefore upholds that capital structure, corporate governance board characteristics and financial performance of manufacturing firms listed on the NSE are significantly related at the 0.05 level. The study recommended that the role of the CEO and board chairman be separated and current debt levels in the manufacturing industry be maintained. Keywords: Corporate Governance, Leverage, Firm Profitability, Firm Cash Flows, Firm Value DOI: 10.7176/RJFA/10-24-04 Publication date: December 31st 201

Audit Quality Effects on Earnings Management of Manufacturing Firms in Nigeria: A Comparative Study of Pre- and Post-International Financial Reporting Standard (IFRS) Period

This study examined the effect of audit quality proxied by Auditors’ Independence (ADI), Audit Firm Size (AFS), Auditor Tenure (ADT) and Audit Firm Specialization (ADS) on shareholders’ earnings (measured as Earnings per Share - EPS) and stock performance (measured as Market Price of Stock - MPS) of listed manufacturing companies in Nigeria, in the pre-and post-International Financial Reporting Standard (IFRS) periods. To achieve this, the study used eleven (11) listed manufacturing companies listed companies that had consistently published their audited annual financial reports from 2009 to 2018. Descriptive statistics, correlation analysis and Ordinary Least Square (OLS) univariate and multiple regression technique were adopted to analyse data obtained, with the ex-post facto research design employed in the methodology. The following results were obtained from the test of hypotheses. Auditors independence, audit firm size and auditors firm specialization have significant and positive impact on EPS and MPS. However, auditors’ tenure was found to significantly affect both EPS and MPS negatively. The IFRS moderated model results revealed that audit quality variables have higher and more positive impact on EPS and MPS in the post-IFRS period, relative to the pre-IFRS, with their effects being statistically significant using the wald restriction test. The findings have direct implication on earnings management and stock performance in the Nigerian Manufacturing Industry. Keywords: Earnings Per Share, Market Price, Auditors’ Independence, Audit Firm Size, Audit Tenure, Audit Firm Specialization DOI: 10.7176/RJFA/10-24-03 Publication date: December 31st 201

Business Planning and the Economic Growth of Small and Medium Scale Enterprises in Nigeria

The purpose of this study was to determine the relevance of business planning  the economic growth of Small and Medium Scale Enterprises (SMEs) and their ability to attract investors and loans, in the face of dwindling economic returns in Nigeria. A five point likert-type questionnaire was utilized in gathering data from 450 entreprenuers based in Lagos metropolis, Nigeria. Three hypotheses were formulated for the study and tested with chi-square statistic at 0.05 level of significance. Findings revealed that the availability of a “business plan” will significantly enhance the ability of SMEs to attract investors and loans from the financial community. Furthermore, it was revealed that business planning will enhance the capacity of SMEs to adequately respond to environmental changes (such as the recent economic meltdown), as well as, gain competitive advantage over competitors. Important recommendations were advanced.LWATI: A Journal of Contemporary Research, 9(2), 1-10, 201