The Effect of Corporate Income Tax on Financial Performance of Listed Manufacturing Firms in Ghana

The study used panel data methodology covering ten listed manufacturing firms over seven years to empirically determine the effect of corporate income tax on financial performance. The study revealed that there is a significant negative relation between corporate income tax and financial performance. On the other hand, firms’ size, age of the firm and growth of the firm show a significant positive relationship with financial performance. Keywords: Corporate income tax, Firms’ size, growth, Age, financial performance

Does the merger improve the operating performance of the company? Evidence from the beverage industry in India [version 2; peer review: 1 approved, 2 approved with reservations]

Background There is fierce market competition both locally and globally. Every organisation seeks to maintain itself and, more crucially, to develop quickly through inorganic means. The expansion of a company through mergers and acquisitions is an inorganic process. Organic growth takes a very long period and is time-bound, but inorganic growth through mergers may be achieved quickly. This research aimed to determine whether the operating results of Indian beverage firms have improved after the merger or not. Methods In order to assess merger-related advantages to the acquiring firms, this study used the operating performance technique, which contrasts the pre-merger and post-merger performance of corporations using accounting data. Secondary data were used to carry out this study. The operating performance was assessed on six operating parameters (ratios) i.e. Operating Profit Margin, Gross and Net Profit Margin, Debt-Equity, Return on Net Worth and Capital Employed. The comparison was done for three years pre and post-merger period of these operating ratios. Results The findings demonstrate that mergers do not seek to increase owner wealth. This finding shows that rather than just becoming larger and achieving covert goals, managers should pay more attention to post-merger integration challenges in order to produce merger-induced synergies. Conclusion This study shows that the M&As have not had a good effect on a company’s operating performance, especially for the chosen beverage companies in India. Since financial measures cannot fully account for the influence of mergers on business performance, future research may create other metrics for merger-related gains. Research that provides profound insights into the causes and trends of post-merger business performance through the different types of mergers and industries would also be beneficial

Credit risk and operational risk on financial performance of universal banks in Ghana: A partial least squared structural equation model (PLS SEM) approach

In recent years, financial institutions especially universal/commercial banks across Africa have been faced with forceful mergers and acquisitions. These occurrences impede the level of financial inclusion and reduces public confidence in the financial system as a whole. This study assessed the effect of credit and operational risk on the financial performance of universal banks in the context of the structural equation model (SEM). Data were collected from all the 24 universal banks in Ghana without missing variables and using the PLS-SEM, the results showed that credit risk influences financial performance negatively contrary to the empirical study but in line with the information asymmetry tenant of the lemon theory. It was also found that operational risk influences the financial performance of the universal banks in Ghana negatively. Furthermore, the study indicated that bank specific variables measured by (asset quality, bank leverage, cost to income ratio and liquidity) significantly influence credit risk, operational risk as well as the financial performance of the universal banks positively. We recommend that banks be encouraged to cut-down their lending rates in other to decrease credit risk and subsequently boost profitability. Regarding operational risk, banks should reduce leverage and have their portfolio more concentrated on liquid investment income so as to boost profitability

Online sales adoption and financial resilience in Sub-Sahara Africa: the moderating role of ownership and enterprise size during Covid-19 crisis

Abstract It is an established fact that the Covid-19 pandemic had a persistent economic uncertainty effect than health uncertainty. In this study, the researchers examined the effects of expanding sales online on the financial resilience of enterprises in sub-Sahara Africa (SSA) during the economic downturn. The researchers measured financial resilience by the extent of sales and cash-flows decline during the pandemic. The researchers collected 4751 unweighted data from the World Bank’s Enterprise Survey and it Covid-19 follow-up survey. Findings from the bivariate probit model and the predictive margin probabilities showed that most enterprises in SSA adopted or expanded proportion of sales online during the pandemic. Increasing the proportion of online sales exerted a decreasing effect on sales and cash-flow declines and thus improved financial resilience at a threshold of 40% during the pandemic. Large enterprises were observed to be more resilient than small and medium enterprises, yet domestic and foreign enterprises had the same level of financial resilience during the pandemic. For enterprises in Africa to realise the 40% threshold of online sales, the researchers encourage enterprises to invest in advertisement for product legitimacy

International Journal of Economics, Commerce and Management DETERMINANTS OF MARKET AND BOOK BASED PERFORMANCE OF MANUFACTURING COMPANIES IN GHANA: AN EMPIRICAL STUDY

Abstract The study explored the determinants of market and book based financial performance of manufacturing companies in Ghana. The data for eleve