Accounting Based Drivers And Implications On Shareholders Value of Quoted Manufacturing Firms In Nigeria

International Journal of Economics and Management Studies

© 2019 by SSRG - IJEMS Journal

Volume 6 Issue 12

Year of Publication : 2019

Authors : Ejoh, NdifonOjong (Ph.D.)

10.14445/23939125/IJEMS-V6I12P124

How to Cite?

Ejoh, NdifonOjong (Ph.D.), "Accounting Based Drivers And Implications On Shareholders Value of Quoted Manufacturing Firms In Nigeria," SSRG International Journal of Economics and Management Studies, vol. 6,  no. 12, pp. 214-222, 2019. Crossref, https://doi.org/10.14445/23939125/IJEMS-V6I12P124

Abstract:

The paper examined the implications of accounting based drivers on shareholders’ value of quoted manufacturing firms in Nigeria between 2009-2018. Specifically, the paper examined how operating drivers (increase in revenue, increase in operating margins and effective taxation), investing drivers (increase in fixed assets and working capital investments) and financing drivers (Weighted Average Cost of Capital) affect the market price of shares of manufacturing. The expost facto research design was employed and data collected from ten (10) quoted manufacturing firms listed firms in
Nigeria on the Nigerian Stock Exchange (NSE). The results of the test of hypotheses using Ordinary Least Square (OLS) multiple regression analysis indicates that operating drivers and investing drivers are shareholder value increasing, while financing driver is shareholder value decreasing. The paper recommended that manufacturing firms increase their fixed assets and working capital investments in order to increase revenue base and operating margins base, while maintaining an optimal capital structure that reduces their Weighted Average Cost of Capital (WACC), in order to maximize shareholders value.

Keywords:

Shareholders Value, Accounting Revenue, Operating Margins, Fixed Assets Investments, Working Capital Investments, Effective Taxation, Weighted Average Cost of Capital.

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