The paper examines the effect net profit, firm size, tangibility, firm growth and risk have on le... more The paper examines the effect net profit, firm size, tangibility, firm growth and risk have on leverage of manufacturing and trading sector companies listed on the Ghana Stock Exchange during the period 2005 to 2014. The paper relied on published financial statements of the listed manufacturing and trading companies for the period. Using a panel regression model, the study found a significant negative relationship between firm size and leverage as well as growth and leverage. Profitability established a negative and insignificant relationship with leverage. An insignificant positive relationship was found between tangibility and leverage and an insignificant positive relationship was also found between risk and leverage. The study suggests listed manufacturing and trading companies should apply the pecking order theory in their capital structure decisions and favor internal source of funds for their financing needs.
This study analyzed the relationship between credit risk and profitability of banks on the Ghana ... more This study analyzed the relationship between credit risk and profitability of banks on the Ghana Stock Exchange. A secondary data in a panel form of seven banks listed on the Ghana Stock Exchange was examined over a period of nine years, using a linear multiple regression model. One key measure of profitability was analyzed in this study that is return on equity. The independent variables included in the regression model were non-performing loan to total loans and advances, and loans and advances to total deposits, bank size, leverage and growth. The results for the study indicate that non-performing loan to total loans and advances and loans and advances to total deposits have significant negative relationship with return on equity. Furthermore, a negative insignificant relationship was established between size and return on equity but significant positive relationships were found between growth and leverage and profitability. It was recommended that Credit officers should ensure that customers looking for loans meet all the necessary requirements through proper due diligence.
Debt financing plays a pivotal role in the success of both large and small businesses since it af... more Debt financing plays a pivotal role in the success of both large and small businesses since it affect their profitability and solvency. The aim of this study is to examine the effect of debt finance on the profitability of SMEs within the Accra Metropolis in Ghana. The study used secondary data collected from 50 SMEs in the Metropolis covering the period from 2004-2013. Profit margin ratio and return on assets were used as measurement of profitability whiles trade credit, short-term loan ratio and long-term loan ratio were used to represent debt finance. The study found short-term loan ratio to have a significant negative relationship with both profit margin ratio and return on assets. However, a positive insignificant relation was found between long-term loan ratio and profit margin ratio but an insignificant negative relation was established with return on assets. Furthermore, a positive insignificant relationship was established between trade credit and profit margin ratio and a positive significant relation was found with return on assets. The study therefore suggests that, Government will gain a lot from promoting SMEs through training and skill acquisition that will enable them better utilize their loans
Debt financing plays a pivotal role in the success of both large and small businesses since it af... more Debt financing plays a pivotal role in the success of both large and small businesses since it affect their profitability and solvency. The aim of this study is to examine the effect of debt finance on the profitability of SMEs within the Accra Metropolis in Ghana. The study used secondary data collected from 50 SMEs in the Metropolis covering the period from 2004-2013. Profit margin ratio and return on assets were used as measurement of profitability whiles trade credit, short-term loan ratio and long-term loan ratio were used to represent debt finance. The study found short-term loan ratio to have a significant negative relationship with both profit margin ratio and return on assets. However, a positive insignificant relation was found between long-term loan ratio and profit margin ratio but an insignificant negative relation was established with return on assets. Furthermore, a positive insignificant relationship was established between trade credit and profit margin ratio and a positive significant relation was found with return on assets. The study therefore suggests that, Government will gain a lot from promoting SMEs through training and skill acquisition that will enable them better utilize their loans.
This paper investigates the relationship between board structure characteristics and financial pe... more This paper investigates the relationship between board structure characteristics and financial performance of Listed Food and Beverage Firms (LFBFs) in Ghana. The study relied on published financial reports of LFBFs for the period of 2001 to 2013. To achieve the objective of the study, we estimated a linear regression model based on panel data which was performed on the dependent variable, return on assets (ROA). Through statistical calculations, we found evidence that board size and Chief Executive Officer duality have significant negative relationships with return on assets, with board composition having insignificant negative relationship with return on assets. However, a significant positive relationship was established between board ownership and return on assets. The study recommends that LFBFs in Ghana should consider having the right mix of experience and skills on the board, but not necessarily considering only a small or large board size. Also, shareholders should encourage board members to own shares in their firms and the few firms practicing CEO duality should work hard to reverse the practice completely.
Working capital management plays a vital role in the success of businesses because of its effect ... more Working capital management plays a vital role in the success of businesses because of its effect on profitability and liquidity. The purpose of this study is to examine the relationship between working capital management practices and profitability of listed manufacturing firms in Ghana. The study used secondary data collected from all the 13 listed manufacturing firms in Ghana covering the period from 2005-2009. Using panel data methodology, the study finds a significantly negative relationship between profitability and accounts receivable days. However, the firms’ cash conversion cycle, current asset ratio, size, and current asset turnover significantly positively influence profitability. The study suggests that managers can create value for their shareholders by creating incentives to reduce their accounts receivable to 30 days. It is further recommended that, enactments of local laws that protect indigenous firms and restrict the activities of importers are eminent to promote increase demand for locally manufactured goods both in the short and long runs in Ghana.
The paper examines the effect net profit, firm size, tangibility, firm growth and risk have on le... more The paper examines the effect net profit, firm size, tangibility, firm growth and risk have on leverage of manufacturing and trading sector companies listed on the Ghana Stock Exchange during the period 2005 to 2014. The paper relied on published financial statements of the listed manufacturing and trading companies for the period. Using a panel regression model, the study found a significant negative relationship between firm size and leverage as well as growth and leverage. Profitability established a negative and insignificant relationship with leverage. An insignificant positive relationship was found between tangibility and leverage and an insignificant positive relationship was also found between risk and leverage. The study suggests listed manufacturing and trading companies should apply the pecking order theory in their capital structure decisions and favor internal source of funds for their financing needs.
This study analyzed the relationship between credit risk and profitability of banks on the Ghana ... more This study analyzed the relationship between credit risk and profitability of banks on the Ghana Stock Exchange. A secondary data in a panel form of seven banks listed on the Ghana Stock Exchange was examined over a period of nine years, using a linear multiple regression model. One key measure of profitability was analyzed in this study that is return on equity. The independent variables included in the regression model were non-performing loan to total loans and advances, and loans and advances to total deposits, bank size, leverage and growth. The results for the study indicate that non-performing loan to total loans and advances and loans and advances to total deposits have significant negative relationship with return on equity. Furthermore, a negative insignificant relationship was established between size and return on equity but significant positive relationships were found between growth and leverage and profitability. It was recommended that Credit officers should ensure that customers looking for loans meet all the necessary requirements through proper due diligence.
Debt financing plays a pivotal role in the success of both large and small businesses since it af... more Debt financing plays a pivotal role in the success of both large and small businesses since it affect their profitability and solvency. The aim of this study is to examine the effect of debt finance on the profitability of SMEs within the Accra Metropolis in Ghana. The study used secondary data collected from 50 SMEs in the Metropolis covering the period from 2004-2013. Profit margin ratio and return on assets were used as measurement of profitability whiles trade credit, short-term loan ratio and long-term loan ratio were used to represent debt finance. The study found short-term loan ratio to have a significant negative relationship with both profit margin ratio and return on assets. However, a positive insignificant relation was found between long-term loan ratio and profit margin ratio but an insignificant negative relation was established with return on assets. Furthermore, a positive insignificant relationship was established between trade credit and profit margin ratio and a positive significant relation was found with return on assets. The study therefore suggests that, Government will gain a lot from promoting SMEs through training and skill acquisition that will enable them better utilize their loans
Debt financing plays a pivotal role in the success of both large and small businesses since it af... more Debt financing plays a pivotal role in the success of both large and small businesses since it affect their profitability and solvency. The aim of this study is to examine the effect of debt finance on the profitability of SMEs within the Accra Metropolis in Ghana. The study used secondary data collected from 50 SMEs in the Metropolis covering the period from 2004-2013. Profit margin ratio and return on assets were used as measurement of profitability whiles trade credit, short-term loan ratio and long-term loan ratio were used to represent debt finance. The study found short-term loan ratio to have a significant negative relationship with both profit margin ratio and return on assets. However, a positive insignificant relation was found between long-term loan ratio and profit margin ratio but an insignificant negative relation was established with return on assets. Furthermore, a positive insignificant relationship was established between trade credit and profit margin ratio and a positive significant relation was found with return on assets. The study therefore suggests that, Government will gain a lot from promoting SMEs through training and skill acquisition that will enable them better utilize their loans.
This paper investigates the relationship between board structure characteristics and financial pe... more This paper investigates the relationship between board structure characteristics and financial performance of Listed Food and Beverage Firms (LFBFs) in Ghana. The study relied on published financial reports of LFBFs for the period of 2001 to 2013. To achieve the objective of the study, we estimated a linear regression model based on panel data which was performed on the dependent variable, return on assets (ROA). Through statistical calculations, we found evidence that board size and Chief Executive Officer duality have significant negative relationships with return on assets, with board composition having insignificant negative relationship with return on assets. However, a significant positive relationship was established between board ownership and return on assets. The study recommends that LFBFs in Ghana should consider having the right mix of experience and skills on the board, but not necessarily considering only a small or large board size. Also, shareholders should encourage board members to own shares in their firms and the few firms practicing CEO duality should work hard to reverse the practice completely.
Working capital management plays a vital role in the success of businesses because of its effect ... more Working capital management plays a vital role in the success of businesses because of its effect on profitability and liquidity. The purpose of this study is to examine the relationship between working capital management practices and profitability of listed manufacturing firms in Ghana. The study used secondary data collected from all the 13 listed manufacturing firms in Ghana covering the period from 2005-2009. Using panel data methodology, the study finds a significantly negative relationship between profitability and accounts receivable days. However, the firms’ cash conversion cycle, current asset ratio, size, and current asset turnover significantly positively influence profitability. The study suggests that managers can create value for their shareholders by creating incentives to reduce their accounts receivable to 30 days. It is further recommended that, enactments of local laws that protect indigenous firms and restrict the activities of importers are eminent to promote increase demand for locally manufactured goods both in the short and long runs in Ghana.
Uploads
Papers by Angmor Lawer
profitability and solvency. The aim of this study is to examine the effect of debt finance on the profitability
of SMEs within the Accra Metropolis in Ghana. The study used secondary data collected from 50 SMEs in
the Metropolis covering the period from 2004-2013. Profit margin ratio and return on assets were used as
measurement of profitability whiles trade credit, short-term loan ratio and long-term loan ratio were used
to represent debt finance. The study found short-term loan ratio to have a significant negative relationship
with both profit margin ratio and return on assets. However, a positive insignificant relation was found
between long-term loan ratio and profit margin ratio but an insignificant negative relation was established
with return on assets. Furthermore, a positive insignificant relationship was established between trade
credit and profit margin ratio and a positive significant relation was found with return on assets. The study therefore suggests that, Government will gain a lot from promoting SMEs through training and skill
acquisition that will enable them better utilize their loans
profitability and solvency. The aim of this study is to examine the effect of debt finance on the profitability
of SMEs within the Accra Metropolis in Ghana. The study used secondary data collected from 50 SMEs in
the Metropolis covering the period from 2004-2013. Profit margin ratio and return on assets were used as
measurement of profitability whiles trade credit, short-term loan ratio and long-term loan ratio were used
to represent debt finance. The study found short-term loan ratio to have a significant negative relationship
with both profit margin ratio and return on assets. However, a positive insignificant relation was found
between long-term loan ratio and profit margin ratio but an insignificant negative relation was established
with return on assets. Furthermore, a positive insignificant relationship was established between trade
credit and profit margin ratio and a positive significant relation was found with return on assets. The study therefore suggests that, Government will gain a lot from promoting SMEs through training and skill
acquisition that will enable them better utilize their loans.
profitability and liquidity. The purpose of this study is to examine the relationship between working
capital management practices and profitability of listed manufacturing firms in Ghana. The study used
secondary data collected from all the 13 listed manufacturing firms in Ghana covering the period from
2005-2009. Using panel data methodology, the study finds a significantly negative relationship between
profitability and accounts receivable days. However, the firms’ cash conversion cycle, current asset
ratio, size, and current asset turnover significantly positively influence profitability. The study suggests
that managers can create value for their shareholders by creating incentives to reduce their accounts
receivable to 30 days. It is further recommended that, enactments of local laws that protect indigenous
firms and restrict the activities of importers are eminent to promote increase demand for locally
manufactured goods both in the short and long runs in Ghana.
profitability and solvency. The aim of this study is to examine the effect of debt finance on the profitability
of SMEs within the Accra Metropolis in Ghana. The study used secondary data collected from 50 SMEs in
the Metropolis covering the period from 2004-2013. Profit margin ratio and return on assets were used as
measurement of profitability whiles trade credit, short-term loan ratio and long-term loan ratio were used
to represent debt finance. The study found short-term loan ratio to have a significant negative relationship
with both profit margin ratio and return on assets. However, a positive insignificant relation was found
between long-term loan ratio and profit margin ratio but an insignificant negative relation was established
with return on assets. Furthermore, a positive insignificant relationship was established between trade
credit and profit margin ratio and a positive significant relation was found with return on assets. The study therefore suggests that, Government will gain a lot from promoting SMEs through training and skill
acquisition that will enable them better utilize their loans
profitability and solvency. The aim of this study is to examine the effect of debt finance on the profitability
of SMEs within the Accra Metropolis in Ghana. The study used secondary data collected from 50 SMEs in
the Metropolis covering the period from 2004-2013. Profit margin ratio and return on assets were used as
measurement of profitability whiles trade credit, short-term loan ratio and long-term loan ratio were used
to represent debt finance. The study found short-term loan ratio to have a significant negative relationship
with both profit margin ratio and return on assets. However, a positive insignificant relation was found
between long-term loan ratio and profit margin ratio but an insignificant negative relation was established
with return on assets. Furthermore, a positive insignificant relationship was established between trade
credit and profit margin ratio and a positive significant relation was found with return on assets. The study therefore suggests that, Government will gain a lot from promoting SMEs through training and skill
acquisition that will enable them better utilize their loans.
profitability and liquidity. The purpose of this study is to examine the relationship between working
capital management practices and profitability of listed manufacturing firms in Ghana. The study used
secondary data collected from all the 13 listed manufacturing firms in Ghana covering the period from
2005-2009. Using panel data methodology, the study finds a significantly negative relationship between
profitability and accounts receivable days. However, the firms’ cash conversion cycle, current asset
ratio, size, and current asset turnover significantly positively influence profitability. The study suggests
that managers can create value for their shareholders by creating incentives to reduce their accounts
receivable to 30 days. It is further recommended that, enactments of local laws that protect indigenous
firms and restrict the activities of importers are eminent to promote increase demand for locally
manufactured goods both in the short and long runs in Ghana.