Open Access Data Article

The Impact of Debt on Capital Structure: Empirical Evidence from Nigeria

Gbalam Peter Eze, Akwarandu Uzochukwu

Asian Journal of Economics, Business and Accounting, Page 7-17
DOI: 10.9734/ajeba/2020/v14i430199

This study evaluates the impact of tax shield on capital structure of quoted non-financial firms in Nigeria. Five hypotheses were formulated following the dependent variables of Long Term Debt Ratio and Short Term Debt Ratio. The independent variables employed for this study are: Operating Income, Non-Debt Tax Shield, Debt Tax Shield, Trade Credit Ratio, Firm Size and Firm Leverage. This study is based on ex-post facto research design and made use of panel data set collected from thirty five (35) non-financial companies over a five year period of 2015 and 2019 financial year.  We analyzed the data set using panel least square regression analysis. Our finding supports the trade-off theory developed by Modigliani and Miller’s [1] who explained that, “the relevance of debt with the existence of taxes is beneficial for the formation of a firm’s capital structure and serves to shield earnings from taxes. The result showed that both variables of debt tax shield and firm leverage significantly impact on capital structure of non-financial firms in Nigeria during the period under investigation. The study recommends among others that concerted efforts should be made by financial regulatory bodies to stabilize the tax structure/system in Nigeria. This is based on the fact that reduction of tax frictions not only increases capital buffers for all firms; it also decreases the “Risk Taking” levels of firm managers.

Open Access Opinion Article

Challenges and Countermeasures to Prevent and Resolve Financial Risks

Chen Zhu, Zixuan Fu

Asian Journal of Economics, Business and Accounting, Page 1-6
DOI: 10.9734/ajeba/2020/v14i430198

Preventing and resolving financial risks has a bearing on national security, overall development, and people's property security. It is a battle that cannot be lost. 2020 is the most crucial year to win the battle against major risks. As a core component of China's financial system, banking financial institutions bear the main responsibility of preventing and controlling financial risks, and they are also the main force in preventing and defusing financial risks. In the past period of time, banking financial institutions have implemented different strategies for different risks, accurately detonated bombs, and achieved phased goals. The rapid growth of non-performing loans has been contained, but there are still some potential risks that cannot be ignored. Therefore, from the perspective of preventing systemic risks, the task of winning the formidable battle is still very arduous, and it needs to be fully motivated and go all out to resolve the risks.

Open Access Original Research Article

Effects of Risk Assessment, Control Environment and Control Activities on Performance of Listed Banks in Ghana

Redruth Nyaaba Ayimpoya, David Amoah Akolgo, Simon Akumbo Eugene Mbilla, Michael Kwame Gbegble

Asian Journal of Economics, Business and Accounting, Page 18-33
DOI: 10.9734/ajeba/2020/v14i430200

Globally, internal controls serve many important purposes for public private and public help organizations. There is however an increasing call for better and improved internal control systems especially in firms that are listed on public market. However, internal control systems, irrespective of how well conceived and implemented cannot provide absolute assurance of management and boards regarding the achievement of objectives. This research focused on the three components of internal control systems namely control environment, risk assessment, and control activities. This study therefore formulated four objectives and investigated how risk assessment, control activities, and control environment affects the performance of Ghanaian banks. In this quantitative study, representatives from twelve listed banks were engaged. Descriptive and regression analysis was performed on the field data. The study result shows while Risk assessment has a strong significant effect on financial performance, Control environment and Control activities, have a weak significant effect on financial performance. The practical implication of the study is that, when assessing the performance of banks, risk areas must be examined critically to reduce or eliminate their impacts on bank performance.

Open Access Original Research Article

Economic Analysis of Crayfish Marketing in Anambra State, Nigeria

Uche Okeke, Temple Nwankwo

Asian Journal of Economics, Business and Accounting, Page 34-44
DOI: 10.9734/ajeba/2020/v14i430201

The study examined the economics of crayfish marketing in Anambra State, Nigeria, Its specifically described the socio-economic characteristics of crayfish marketers: Identified the marketing channels of crayfish in the area; estimated the profitability of crayfish marketing by the intermediaries; estimated the marketing efficiency level attained .by the intermediaries; established the determinants of net marketing income realized by the marketers and identified constraints to crayfish marketing in the area. The multistage sampling procedure was used to select two agricultural zones (Onitsha and Awka), 12 daily markets and 120 respondents (60 wholesalers and 60 retailers) for the study. Well, a structured questionnaire was administered to the respondents for the cross-sectional data collection on the marketing variables. Data were analyzed using descriptive statistics, budgetary technique, Shephard-Futrell technique and multiple regression analysis. Findings on the socio-economic characteristics of the respondents revealed that there were more female than male in crayfish marketing and the majority (91%) of the respondents had no access to credit facilities. The study revealed three level marketing channels where the majority (78%) of the respondents identified channels one (fishermen/supplier wholesalers retailers consumers) as the most frequently patronized. The second channel was (fishermen retailers consumers), while the third was (fishermen wholesalers -restaurants/hotels). The report also indicated that the retailers realized more profit than the wholesalers and there was a high level of inefficiency among the wholesalers (95.12%) than the retailers (81.67%). Findings on the effects of socio-economic factors of the respondents on net marketing income showed that marital status, marketing cost, access to credit and product price had significant influences on net marketing income while age, gender, educational level and marketer's years of experience were not significant. The wholesalers identified inadequate storage facilities as the highest constraint to crayfish marketing in the area; followed by high transportation cost, high market fees, unstable price, lack of access to loan and inadequate capital. While the retailers implicated high market fees as their major constraint, followed by inadequate capital, unstable price, lack of access to loan, inadequate storage facility and high cost of transportation as the least problem.

Open Access Original Research Article

Assessing the Financial Statement (Ratios) of Anglogold-Ashanti Limited, Ghana

Regina Wompakeah Bagina

Asian Journal of Economics, Business and Accounting, Page 45-55
DOI: 10.9734/ajeba/2020/v14i430202

This study assessed the financial position of Anglogold –Ashanti ltd, Ghana by conducting various financial ratio analyses. The study used time series data for a period of 7 years (2008/09 to 2013/14) of Anglogold Ashanti Limited. The data was analysed using standard tool ratio analysis. This was applied to evaluating the financial performance. Among the ratios used are the Liquidity ratio, current or acid test ration, profitability ratio, gross margin, return on equity, debt to equity. Tables were used in the data presentation.  The study findings revealed that both current and the quick ratios has a fluctuating trend of continues increase for the study period (2009-2011), that is (1.68, 1.93, 1.33, 1.77, 0.53, 0.53) and (0.90, 0.89, 0.62, 1.06, 0.65, 0.67 0.84). Also, the higher the ratio the more solvent the business is. Although, the company’s ratio was high it did not always imply that there was solvency but also indicated that the company was holding excess liquid funds. The quick ratio was also in a fluctuating trend throughout the period 2008 – 14. The company liquidity position was not far from the normal standard; to some extent it was satisfactory. The total assets turnover ratio also indicated an increasing trend from the year 2008 – 14(0.56, 0.62, 0.73, 0.54, 0.56, 0.49 and 0.39. Based on the findings, the study concluded that, the company’s overall position is not at a good position, particularly the last year under review due to decreased profit level from the previous year. It is better for the organization not to diversify the funds to different sectors in the present market scenario. The study recommended the need for the company to increase its sales by more promotions and by quick movements of the finished goods.