Accounting Ratios as Means for Measuring a Firm’s Financial Performance

Egiyi, Modesta Amaka; Okafor, Victor Ikechukwu

doi:10.5281/zenodo.7192763

Accounting Ratios as Means for Measuring a Firm’s Financial Performance

Authors: Egiyi, Modesta Amaka, Okafor, Victor Ikechukwu

Journal: Global Journal of Auditing and Finance (GJAF), ISSN 1694-4445

Citation: GJAF 4(3), 2022-09-15.

DOI: 10.5281/zenodo.7192763

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Type: Original Research

Abstract

The purpose of this research work is to examine accounting ratios as a means of measuring a firm’s financial performance. The ex-post facto research was used to analyze the Data from Manufacturing companies listed on the Nigerian Stock Exchange (NSE) between 2012 and 2021 that were selected for this study. The study’s sample included thirteen (13) manufacturing firms that are publicly traded on the Nigerian Stock Exchange (NSE). Secondary Data were used in the study. Panel Data Regression was employed to conduct the study, which made use of Evie 10.0 as its statistical tool. The outcome demonstrates that accounting ratios have a favorable impact on financial success. Another significant finding is that, at the 5% level of significance, the market ratio is not statistically significant to financial performance. The study suggests that management and policyholders acknowledge and effectively use accounting ratios as the most significant performance evaluation indicators and also pay attention to other potential elements that may contribute to performance evaluation through ratio analysis.

Keywords

Accounting Ratio, Firm’s Financial Performance, Manufacturing Companies Authorship 1 Egiyi, Modesta Amaka PhD & 2 Okafor, Victor Ikechukwu PhD DOI:

Published by Academic Ink Review Journal. Open Access under CC BY 4.0.