Liquidity Management and Firm Value of Quoted Manufacturing Companies in Nigeria

Etim, Etim Osim; Umoffong, Nsima Johnson; Enang, Ekwere Raymond; Agatevure, Glory

doi:10.47509/iajfa.2022.v03i01.04

“…Consequently, the aspiration of shareholders to augment their wealth and profitability typically exerts an influence on the growth of companies in relation to their value, investment drive, and strategies for financing positioning. (Luthfiah and Suherman, 2018; Etim et al, 2022) [13,19] . The assessment of an entity's worth is determined by considering the perspectives of profit maximisation and wealth maximisation, which serve as two influential factors that justify the expansion of market value.…”

Section: Firm Valuementioning

confidence: 99%

“…The primary objective of employing a hedge is to mitigate the level of volatility that is typically associated with variations in the value of an investment that is not directly correlated with the investment's overall performance. [13] . The significance of this matter stems from the inherent volatility of the foreign exchange market in Nigeria, whereby the disparity between the official exchange rate and the parallel market rate is substantial.…”

Section: Hedging and Hedge Accountingmentioning

confidence: 99%

“…The concept of firm value pertains to the aggregate value of assets possessed by an entity, serving as an indicator of the overall prosperity enjoyed by the owners of said entity. The asset earning power is determined by various factors, as noted by Lukaya and Mukani (2015) [18] and Etim et al (2022) [13] .…”

Section: Firm Valuementioning

confidence: 99%

“…The market value of entities is influenced by a combination of factors, including the structure of asset management ~ 104 ~ operational and financial performances, the kind and quality of products or services, and the leverage and liquidity of a corporation. The measurement of firm value in this study was conducted by calculating the sum of the market value of equity and the book value of debts, which was then divided by the total assets (Etim et al, 2022) [13] .…”

Section: Firm Valuementioning

confidence: 99%

See 2 more Smart Citations

Hedge accounting and the value of manufacturing firms in Nigeria

Ukpong,

Akpan,

Ukpong

et al. 2023

Asian J. Manage. Commerce

0

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The study was conducted to examine the influence of hedge accounting variables on firm value of listed manufacturing firms in Nigeria. This was conceived due to the fact that the business environment is volatile, complex, multifaceted and risky and uncertainties being the order of the day, since most of the assets and liabilities of manufacturing companies in Nigeria have derivative features. Ex-post facto research design was adopted in the study using Secondary data obtained from the annual reports of the 42 sampled listed manufacturing firms for the period 2013 to 2022, the nature of the data was panel. Market value of the firms was the dependent variable, while exchange rate, interest rate, and leverage were the independent variables. Data were analyzed using Ordinary Least Squares (OLS) regression technique. Results revealed that exchange rate and interest rate were statistically significant (P-value 0.0005 and 0.0072) while leverage was not (P-value 0.5509). The coefficient of variation was 0.9603%, meaning the variables of the study account for 96.03% of the variation in firm value while 3.97% by other variables not captured in the model. It was concluded that, hedge accounting practices influence firm value of listed manufacturing companies in Nigeria. It was recommended that hedge accounting practices be standardized to reduce incidences of incurring excessive losses.

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“…Taipi & Ballkoci (2019) explored the link between capital expenditures and firm performance in the Albanian construction sector, revealing a positive correlation between capital expenditures and financial performance, while emphasizing the role of leverage ratio. Etim (2019) investigated the relationship between capital expenditure decisions and the long-term value of manufacturing firms in Nigeria, finding a significant positive correlation between the two, suggesting the importance of strategic investment decisions. Turner and Hesford (2019) analyzed the short-term and longterm impacts of renovation capital expenditure on hotel property performance, finding initial benefits followed by long-term negative effects on revenue and profitability.…”

Section: Theories Of Investmentmentioning

confidence: 99%

Capital Expenditure Decisions and Market Value of Quoted Food and Beverages Firms in Nigeria

Dr Amadi Ngozi Eleba,

Dr. Jack Obiazi Tubotamuno-Ojas

2024

Financ. account. res. j.

0

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This study examined the relationship between capital expenditure decisions and market value of quoted food and beverages manufacturing firms in Nigeria. Secondary data obtained from 22 quoted food and beverage manufacturing firms from 2012 - 2022 obtained from the Nigerian Exchange Fact book and annual reports of the quoted food and beverage manufacturing firms. The study modeled market value as the dependent variables while capital expenditure decision was proxy using firms’ capital expenditure decision on equipment, buildings, human, maintenance, expansion and sustenance. Panel data methodology was employed while the fixed effects model was used as estimation technique at 5% level of significance. Fixed effects, random effects and pooled estimates were tested while the Hausman test was used to determine the best fit. The result show that the proxies of capital expenditure decision explained 94.4 percent variation in market value of quoted food and beverages manufacturing firms in Nigeria. The beta coefficient indicates that firms’ capital expenditure on sustenance contribute 0.97 percent, capital expenditure on expansion reduces market value by 0.006 percent, capital expenditure on plant leads to 8.9 percent increase in firms’ value, capital expenditure on human capital contributes 0.02 percent and capital expenditure on equipment reduced valuation of the firm by 0.01 percent. The model was judge significant based on f-statistic and probability value while the Durbin Watson found no autocorrelation among the variables. The study conclude that capital expenditure decision have significant effect on market value of quoted food and beverage manufacturing firms in Nigeria. We recommend that policies such as optimization of capital investment decision to increase value of the quoted firms. Keywords: Capital Expenditure Decisions, Valuation, Food and Beverage Manufacturing, Nigeria Firm Value Optimization.

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Untitled

2023

Asian J. Manage. Commerce

0

View full text Add to dashboard Cite

The study was conducted to examine the influence of hedge accounting variables on firm value of listed manufacturing firms in Nigeria. This was conceived due to the fact that the business environment is volatile, complex, multifaceted and risky and uncertainties being the order of the day, since most of the assets and liabilities of manufacturing companies in Nigeria have derivative features. Ex-post facto research design was adopted in the study using Secondary data obtained from the annual reports of the 42 sampled listed manufacturing firms for the period 2013 to 2022, the nature of the data was panel. Market value of the firms was the dependent variable, while exchange rate, interest rate, and leverage were the independent variables. Data were analyzed using Ordinary Least Squares (OLS) regression technique. Results revealed that exchange rate and interest rate were statistically significant (P-value 0.0005 and 0.0072) while leverage was not (P-value 0.5509). The coefficient of variation was 0.9603%, meaning the variables of the study account for 96.03% of the variation in firm value while 3.97% by other variables not captured in the model. It was concluded that, hedge accounting practices influence firm value of listed manufacturing companies in Nigeria. It was recommended that hedge accounting practices be standardized to reduce incidences of incurring excessive losses.

show abstract

Liquidity Management and Firm Value of Quoted Manufacturing Companies in Nigeria

Cited by 4 publications

References 4 publications

Hedge accounting and the value of manufacturing firms in Nigeria

Hedge accounting and the value of manufacturing firms in Nigeria

Capital Expenditure Decisions and Market Value of Quoted Food and Beverages Firms in Nigeria

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