International Journal of Trend in Scientific Research and Development (IJTSRD)

Volume 5 Issue 5, July-August 2021 Available Online: www.ijtsrd.com e-ISSN: 2456 – 6470

Effect of Financial Ratios on Firm Performance:

Study of Selected Brewery Firms in Nigeria
Agbata, Amaka Elizabeth PhD; Osingor, Arinze Stanley; Ezeala, George PhD
Department of Accountancy, Nnamdi Azikiwe Univeristy, Awka, Nigeria

ABSTRACT How to cite this paper: Agbata, Amaka

The study assessed the effect of financial ratios on performance of Elizabeth | Osingor, Arinze Stanley |
Quoted Breweries firms in Nigeria. It made use of ex-post facto Ezeala, George "Effect of Financial
research design. Data were gotten from secondary sources obtained Ratios on Firm Performance: Study of
from NSE fact books and annual reports/accounts of the selected Selected Brewery Firms in Nigeria"
Published in
Breweries Companies. The population of the study consisted of
International
thirteen (13) quoted Breweries firms listed on the Nigerian Stock Journal of Trend in
Exchange as at 31st December, 2018. Four (4) of the quoted Scientific Research
Breweries firms are selected to form the sample of the study for the and Development
period of nine (9) years (2010 – 2018). The relevant data obtained (ijtsrd), ISSN: 2456-
were subjected to statistical analysis using Pearson correlation 6470, Volume-5 | IJTSRD45177
coefficient and regression analysis. The results of this study revealed Issue-5, August
that there is a significant relationship between current ratio and firm 2021, pp.1664-1671, URL:
performance but negative effect. Debt equity ratio has a significant www.ijtsrd.com/papers/ijtsrd45177.pdf
effect on return on asset of Nigerian Breweries. The result of the
study concludes that Nigerian breweries companies are relatively Copyright © 2021 by author (s) and
International Journal of Trend in
using an optimal mix of debt to equity which is evident from the
Scientific Research and Development
significant positive relationship of debt-equity ratio with financial Journal. This is an
performance of the Nigerian Breweries. The researchers Open Access article
recommended that the management should employ all carefulness distributed under the
while financing with long term debt instruments; endeavor to find out terms of the Creative Commons
the best and optimal combination of long term debt and equity that Attribution License (CC BY 4.0)
will impact positively on the value of the firm. (http://creativecommons.org/licenses/by/4.0)

KEYWORDS: Financial Ratios, Firm Performance, Brewery Firms,

Debt Instruments, Equity

1. INTRODUCTION
The financial ratio is one of the strategies for maximization (Panwala, 2009). It can be achieved by
determining an organization's degree of performance. financial performance analysis, according to Bhunia,
It is defined as the methods for converting aggregate Mukhuti, and Roy (2011). However, just because a
financial data into meaningful quotients that can be number appears on a financial statement does not
compared to other financial data. The difficulty in mean that number is significant or that it provides us
determining a firm's success with financial ratios is with relevant information; the importance of the
achieving the required trade-off between liquidity, number appears only when compared with other
solvency, and profitability (Padachi, 2006; Lazaridis, number (Tofeeq, 1997). Financial ratios are tools
2006). Financial ratio management in terms of used to analyze financial conditions and performance.
liquidity, solvency, and profitability is critical for Although financial accounting statements show the
financial performance since it has a direct impact on financial positions of a business at the end of a
business profitability (Rajesh &Ramana, 2011). financial period, but they do not present accurate
Maintaining a firm's liquidity for day-to-day performance on the level of performance or efficiency
operations is an important component of managing its of operations of a business at the end of financial
finance and working capital, since it ensures the firm period (Lucey 1988). The question that financial
functions smoothly and improves its capacity to meet ratios seem to drive more on the values attached to
its obligations (Eljelly, 2004). As a result, the firms has a very controversial issue and yet very
ultimate goal of profitability can be realized through much unresolved. Many breweries depend on
optimal resource allocation and shareholder value measuring annual profit and few other indicators,

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probably because of the difficulty in measuring firm’s relationships between the items of the balance sheet
growth indicators and the influence it exerts on the and the profit and loss account.
firm’s value. Many investors in Nigeria are
Firm Performance
uneducated or illiterate and as a result of ignorance or
After controlling for risk and applying an acceptable
inexperience, they cannot use or employ financial
rate of return, Kothari (2001) defined company
ratios in evaluating the performance of the companies
performance as the present value of predicted future
(James, 2010). According Hermanson (1992),
cash flows. According to Eyenubo (2013), it is the
existing shareholders use the cash dividends and
achievement of pre-defined objectives, targets, and
interest paid to them in evaluating the performance of
goals within a given time frame. According to
the companies for investment decision. These
Carolyne (2015), firm performance is a subjective
parameters do not give accurate information about the
assessment of how successfully a company can utilise
performance and efficiency of operation of the
its assets from its core method of operation to
companies. Based on these problems, the study
generate more income. Financial performance
examined the effect of financial ratios on firm
measures are used by all firms as part of their
performance.
performance management.
Objectives of the Study
Current Ratio and Firm Performance
The main objective of this study was to assess the
The current ratio is an indication of a firm`s market
effect of financial ratios on performance of quoted
liquidity and ability to meet creditors demand.
Breweries Firms in Nigeria. It addressed the
Acceptable current ratios vary from industry to
following specific objectives:
industry and are generally between 1.5 and 3 for
1. Evaluate the effect of current ratio on firm
healthy businesses. If a company`s current ratio is in
performance.
this range, then it generally indicates good short-term
2. Determine the effect of debt-equity ratio on firm
financial strength. If current liabilities exceed current
performance.
assets (the current ratio is below 1), then the company
3. Ascertain the effect of net profit margin on firm
may have problems meeting its short-term
performance.
obligations. If the current ratio is too high, then the
Hypotheses of the Study company may not be sufficiently using its current
The following null hypotheses were formulated to assets or its short-term financial facilities. Current
guide the study ratio or working capital ratio measures current assets
H01: There is no significant effect of current ratio on against current liabilities. It measures the company’s
firm performance. ability to pay back its short-term debt obligations with
H02: There is no significant effect of debt-equity ratio its current assets. It is calculated by dividing current
on firm performance. assets by current liabilities. James (2009) stated that it
is the analysis of financial statements that is used to
H03: There is no significant effect of net profit margin measure company performance. If the ratios indicate
on firm performance. poor performance, investors may be reluctant to
2. Review of Related Literature invest.
Conceptual Framework Debt Equity Ratio and Firm Performance
Financial Ratio Debt equity ratio shows how efficient the
Financial ratio, according to Osisioma (2000), is an organization uses other people’s money and whether
investigation of the resolutions or separations of data it is using a lot of borrowed money (Lasher, 2005). It
into their elements or component parts, as well as the checks the financial structure of the business by
tracing of facts back to their source in order to find comparing debt against total capital, against total
the general principles behind individual phenomena. assets and against owners' funds. The ratio helps to
Financial ratios, according to Okwuosa (2005), are a check how "leveraged" a company is, and also the
way of expressing the links that exist between the financial maneuverability of the company in difficult
ratio analyses. Financial ratio is the most significant times. The ratio tells a lot about the business. It is
technique for assessing the performances of firms calculated by taking the debt owed by the company
from their financial statements, according to the and divided by the owner’s equity, also known as
Institute of Chartered Accountants of Nigeria - ICAN capital.
(2006). Pandey (2010) sees financial ratio as the
means of identifying the financial strength and Net Profit Margin and Firm Performance
weakness of the firm by properly establishing Net profit margin, also known as net margin,
relationships in the firm through properly establishing indicates how much net income a company makes
with total sales achieved Thachappilly (2009). A

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higher net profit margin means that a company is Erdogan (2015). The purpose of this study was to
more efficient at converting sales into actual profit. determine the impact on the corporate financial
Net margin measures how successful a company has performance to the several financial indicators.
been at the business of making a profit on each dollar Companies that are traded continuously in Borsa
sales. It is one of the most essential financial ratios. İstanbul-30 (BIST-30) between 2002-2013 periods
Net margin includes all the factors that influence were analyzed in this study for this purpose. Current
profitability whether under management control or ratio, earnings per share, leverage ratio, firm size and
not Oberholzer & Westhuizen (2004). The higher the market value to book value ratio were used as
ratio, the more effective a company is at cost control. independent variables. Net profit margin was used as
Compared with industry average, it tells investors dependent variables. The relationship between
how well the management and operations of a variables was analyzed by using panel data.
company are performing against its competitors. According to the results of analysis, there was a
Compared with different industries, it tells investors positive and significant relation between corporate
which industries are relatively more profitable than performance (t-period) and current ratio and corporate
others. size (t- period) and there is a negative and significant
relation between corporate performance (t-period)
Theoretical Framework
and leverage ratio (t-period).
The study was based on Stakeholder Theory.
Stakeholder Theory was propounded by Edward R Rumman and Kutum (2015) carried out a research on
Freeman in 1983. It argues that there are other parties the stability of the financial ratios of Jordanian
involved in a business organization which include Industrial Companies. The purpose of the study was
employees, customers, suppliers, financiers, to identify if the financial ratios of Jordanian
communities, governmental bodies, political groups, industrial companies remained stable across sector
trade associations, and trade unions. And their interest and over time. The study used six financial ratios
must also be satisfied. It posits that companies should from fifty-six companies across six sectors with
align the interest of the shareholders and other financial information from 2010 to 2014. A two way
corporate stakeholders as one. This theory is related multivariate analysis of variance was performed to
to this study as the stakeholders assess the identify the stability of the ratios across the sectors
performance of the firms using financial ratios. and over the time. The results of the study showed
Moreover, the effect of financial ratio on firm that the financial ratios which showed some
performance will directly affect the decisions made difference across sector were EBITTA (Earnings
by the stakeholders of the company, and will also before Interest and Tax), CAT (Current Assets
give them an insight on the financial performance and Turnover) and CFTA (Cash Flow to Total Assets).
position of the firms. There were no differences observed between the
financial ratios over time. The interaction of Time
Empirical Review
and Sector revealed no significant interaction effects.
Nwankwo (2018) researched on the effect of
accounting ratios on the financial performance of Recommendation was not stated.
selected firms on brewery industry in Nigeria. One of Accounting ratios as a veritable tool for corporate
the specific objective was to appraise the effect of investment decisions in Delta State Nigeria was
dividend per share on market value of brewery firms studied by Aniefor and Oboro (2015). The objective
in Nigeria. The research adopted ex-post facto of the study was to identify the extent to which
research design covering the period of ten years, accounting ratios enhances the liquidity position of an
2007-2016. Secondary data were collected from organization. Questionnaire was used as the
annual report and accounts of selected brewery firms instrument for data collection and administered on
quoted in the Nigeria Stock Exchange. The data were eighty (80) respondents of the organizations under
analyzed using multiple linear regression technique. study in Delta State randomly selected using Taro-
Findings indicate that Dividend per Share had Yamane formula. The sample size from a population
positive and significant effect on market value while of 100 is 80 respondents at 95% confidence level.
return on equity has positive and insignificant effect Data analysis was made using simple percentage
on market value of firms. The study hereby tables and hypotheses were tested using the Pearson
recommended that firms should enhance both their product moment correlation co-efficient and the t-test
Dividend per Share and return on equity to grow the at 0.05% level of significance. The result showed that
market values \of brewery firms in Nigeria. positive and significant relationship exists between
The effect of various financial ratios on company accounting ratios and the study of liquidity position of
financial performance was studied by Oruc and an organization. The result also showed that positive

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and significant relationship exists between accounting Enekwe, Okwo and Ordu (2013) studied the
ratios in providing avenue for examining the relationship between the financial ratio analysis and
operational efficiency of management in an profitability of the Nigerian Pharmaceutical industry
organization. The study, however, recommended that over the past eleven (11) years period from 2001-
organizations should never base conclusion on ratio, 2011. A multiple regression model was used. The
non-recurring items whether profit or loss should be study covered five (5) variables for the analyses such
eliminated when computing ratios, interpretation of as: Inventory Turnover Ratio (ITR); Debtors’
results according to the general business conditions Turnover Ratio (DTR); Creditors’ Velocity (CRSV);
and a host of others for effective application of Total Assets Turnover Ratio (TATR) and Gross Profit
accounting ratios for proper investment decisions in Margin (GPM). Profitability as a dependent variable
corporate organizations. was expressed by Gross Profit Margin (GPM) while
Borhan, Mohammed and Azmi (2014) researched on financial ratio analysis represents as ITR, DTR,
the impact of financial ratios on the financial CRSV and TATR for independent variables. The
performance of a chemical company. The purpose of study reported that there is a negative relationship
the paper was to examine the impact of financial between all independent variables with profitability in
ratios on the financial performance of a chemical the Nigerian pharmaceutical industry.
company: Lyondell Basell Industries (LYB). Some 3. Methodology
selected ratios: current ratio (CR) and quick ratio Ex-post facto research was used in this study. From
(QR) represent the liquidity ratios; debt ratio (DR) 2010 to 2018, breweries listed on the Nigerian Stock
and debt equity ratio (DTER) represent the leverage Exchange (NSE) were chosen for this study. The
ratios, while operating profit margin (OPM) and net study's population consisted of thirteen (13) Nigerian
profit margin (NPM) represent the profitability ratios. brewing companies that are publicly traded on the
The financial ratios were measured from 2004 to Nigerian Stock Exchange (NSE). Purposive sampling
2011, quarterly. Secondary data were used and was used to choose the sample size of four (4) quoted
multiple regression analysis was employed in data beer enterprises. Secondary data was used in the
analysis. The results showed that CR, QR, DR and study. Pearson Coefficient and Regression Analysis
NPM had a positive relationship while DTER and with E-view 9.0 were the statistical tools utilized to
OPM had a negative relationship with the company's test the hypothesis.
financial performance.
Variables measurements
Table 3.1 Measurement of Variables
V a r i a b l e A c r o n y m M e a s u r e m e n t
I n d e p e n d e n t
Financial Ratio
Current Ratio CR Current Asset/Current Liability
Debt-Equity Ratio DER Long Term Debt/Total Asset
Net Profit Margin NPM Profit After Interest and tax/Revenue
Dependent
Firm Performance
Return on Asset ROA Net profit after tax/Ave net assets X 100%
Control Variable
Firm size FS Natural log of total assets
Firm age FA No of years since incorporation in its log
Source: Researchers’ Compilation (2019)
Model Specification
Firm performance (FP) = f (Financial Ratio)
Financial ratio was proxied by Current Ratio (CR), Debt Equity Ratio (DER), and Net Profit Margin (NPM),
while Firm Performance was proxied by ROA. The equation is expressed as follows:
FP = a + B1CR + B2DER + B3NPM + u
Where:
FP = Firm Performance
a = constant
B1 – B3= Coefficients of explanatory variables

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CR = Current Ratio
DER = Debt-Equity Ratio
NPM = Net Profit Margin
u = Error term
The general expression of Return on Asset (ROA) in the form of equation is written as follows:
ROA = a + B1CR + B2FS + B3FA + u (1)
ROA = a + B1DER + B2FS + B3FA + u (2)
ROA = a + B1NPM + B2FS + B3FA + u (3)
Decision Rule
If the statistical analysis shows that the significance level is below the cut-off value of 0.05, we reject the null
hypothesis and accept the alternate hypothesis.
4. Presentation and Analysis of Data
Data used in this study were obtained from the sampled companies annual reports and NSE fact book.
Data Analysis
The researcher firstly tested the data and variables to an Augmented Dickey Fuller (ADF) Unit Root Test with
the aid of E-view statistical software Ver. 9.
Table 4.1 Augmented Dickey Fuller (ADF) Unit Root Test Results
V a r i a b l e s T e s t C r i t i c a l V a l u e s Test Statistics Status
1 % 5 % 1 0 % A D F (Stationary)
R O A - 4 . 4 2 0 5 9 5 - 3 . 2 5 9 8 0 8 -2.771129 - 3 . 6 9 7 3 6 5 1 ( 0 )
C R - 2 . 9 3 7 2 1 6 - 2 . 0 0 6 2 9 2 -1.598068 - 3 . 9 4 3 4 5 9 I ( 2 )
D E R - 1 . 5 9 8 0 6 8 - 2 . 0 0 6 2 9 2 -2.937216 - 3 . 9 4 3 4 5 9 I ( 2 )
N P M - 4 . 5 8 2 6 4 8 - 3 . 3 2 0 9 6 9 -2.801384 - 4 . 8 3 5 9 4 6 I ( 1 )
F Z - 4 . 8 0 3 4 9 2 - 3 . 4 0 3 3 1 3 -2.841819 - 4 . 6 6 2 2 7 4 I ( 1 )
Source: Data Computation Output (2019)
As indicated from the table 4.2, only Return on Asset (ROA) was stationary at level. This entails that ROA and
DER follow the I (2) stochastic process; CR and NPM follow the I (1) stochastic process but ROA follows the
1(0) stochastic process.
Test of Hypotheses
H01: There is no significant effect of current ratio on firm performance.
Table 4.2 Regression Analysis showing the effect of current ratio (CR) on Return on asset (ROA)
D e p e n d e n t V a r i a b l e : D R O E
M e t h o d : L e a s t S q u a r e s
D a t e : 1 1 / 1 3 / 1 9 T i m e : 0 0 : 4 9
S a m p l e ( a d j u s t e d ) : 2 0 1 0 2 0 1 8
Included observations: 9 after adjustments
V a r i a b l e Coefficient Std. Error t-Statistic Pro b .
C R -4.090658 4.264426 -0.959252 0.0045
C -0.026495 0.118832 -0.222959 0.8310
R - s q u a r e d 0.630969 Mean dependent var -0.053240
Adjusted R-squared -0.711537 S.D. dependent var 0.324858
S.E. of regression 0.326726 Akaike info criterion 0.812931
Sum squared resid 0.640501 Schwarz criterion 0.832792
Log likelihood -1.251725 Hannan-Quinn criter. 0.678981
F - s t a t i s t i c 0.920164 Durbin-Watson stat 1.639551
Prob(F-statistic) 0.004475
Source: Researcher’s E-View 9.0 Output
Interpretation
R2 measures the percentage of return on asset that could be explained by changes in independent variable,
current ratio (CR). Here, R2 is 0.711537 (71.30%) which implies that about 13.30% of variation in return on
equity could be explained by the effect of independent variable, current ratio (CR) while about 86.70% could be

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attributed to other factors capable of effecting changes in return on asset of Nigerian Breweries. In this case,
Durbin-Watson statistic is 1.639551. This indicates the absence of autocorrelation in the data series. In general,
It can be seen from the table 4.3 (ROA), the p-value of 0.004475 is less than a-value of 0.05.Therefore, H0 is
rejected as well from the table 4.3 ROA, the p-value of 0.0045 is less than a-value of 0.05.Therefore, H0 is
rejected and H1 still accepted. Therefore, we conclude that current ratio (CR) has statistical positive significant
effect on the Return on Assets (ROA) of the listed Nigeria Breweries firms. These agreed with our apriori
expectation.
H02: There is no significant effect of Debt-Equity Ratio on firm performance.
Table 4.3 Regression Analysis showing the effect of Debt-Equity Ratio (DER) on Return on Assets
(ROA)
D e p e n d e n t V a r i a b l e : D R O A
M e t h o d : L e a s t S q u a r e s
D a t e : 1 1 / 1 3 / 1 9 T i m e : 0 0 : 4 5
S a m p l e ( a d j u s t e d ) : 2 0 1 0 2 0 1 8
Included observations: 9 after adjustments
V a r i a b l e Coefficient Std. Error t-Statistic Pro b .
D D E R 1.000000 5.900017 1.70E+16 0.0000
C 0.000000 1.820017 0.000000 1.0000
R - s q u a r e d 1.000000 Mean dependent var -0.053240
Adjusted R-squared 1.000000 S.D. dependent var 0.324858
S.E. of regression 5.070017 Sum squared resid 1.540032
F - s t a t i s t i c 2.880032 Durbin-Watson stat 1.450000
Prob(F-statistic) 0.000001
Source: Researcher’s E-View 9.0 Output
Interpretation
R2 measures the percentage of Return on Equity that could be explained by changes in independent variable,
Debt to equity. Here, R2 is 1.00 (100%) which implies that 100% of variation in return on asset could be
explained by the effect of independent variable, Debt to equity while about 0% could be attributed to other
factors capable of effecting changes in return on asset of Nigerian Brewery companies. Here also, the Durbin-
Watson statistic is 1.450000. This indicates the absence of autocorrelation in the data series. In general, It can be
seen from the table 4.2.3 (ROA), the p-value of 0.000001 is less than a p-value of 0.05.Therefore, since the p-
value of 0.0000 is less than a-value of 0.05.Therefore, H0 is rejected. Therefore, we conclude that Debt to Equity
Ratio (DER) has statistical significant positive effect on the Return on Assets (ROA) of the listed Nigeria
Breweries firms.
H03: There is no significant effect of net profit margin on firm performance.
Table 4.4 Regression Analysis showing the effect of Net Profit Margin (NPM) on Return on Assets
(ROA)
D e p e n d e n t V a r i a b l e : D R O A
M e t h o d : L e a s t S q u a r e s
D a t e : 1 1 / 1 3 / 1 9 T i m e : 0 0 : 5 0
S a m p l e ( a d j u s t e d ) : 2 0 1 0 2 0 1 8
Included observations: 9 after adjustments
V a r i a b l e Coefficient Std. Error t-Statistic Pro b .
D T D T A 0.022290 0.184206 0.121008 0.0071
C -0.003646 0.025961 -0.140446 0.8923
R - s q u a r e d 0.502087 Mean dependent var -0.002792
Adjusted R-squared -0.640471 S.D. dependent var 0.070186
S.E. of regression 0.074953 Akaike info criterion -2.150774
Sum squared resid 0.039326 Schwarz criterion -2.106947
Log likelihood 11.67848 Hannan-Quinn criter. -2.245354
F - s t a t i s t i c 0.014643 Durbin-Watson stat 1.013777
Prob(F-statistic) 0.007085
Source: Researcher’s E-View 9.0 Output

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Interpretation
From the regression analysis, Table 4.4 indicates that there is a positive (t-statistics, 0.022290) but significant (p-
value, 0.0071) association between Net Profit Margin (NPM) and Return on Assets (ROA) of listed Nigerian
Brewery companies. This positive effect implies that a 1% increase in Net Profit Margin (NPM)will tend to
increase the level of Return on Assets (ROA) by 0.022290 and vice versa. Net Profit Margin (NPM) has
significantly affected the Return on Assets of the listed Nigerian Brewery companies. R2 measures the
percentage of Return on asset that could be explained by changes in independent variable. In this case, R2 is
0.002 (0.64%). This implies that about 64% of variation in return on asset could be explained by the effect of
independent variable, while about 36% could be attributed to other factors capable of effecting changes in return
on asset of Nigerian Brewery companies. In this case, the Durbin-Watson statistic is 1.013777. This indicates the
absence of autocorrelation in the data series. Conclusively, It can be seen from the table 4.5 (ROA), the p-value
of 0.007085 is less than a-value of 0.05. Therefore, H0 is rejected and H1 is accepted, we conclude that Net Profit
Margin (NPM) has statistical significant positive effect on Return on Assets (ROA) of the listed Brewery
company in Nigeria.
5. Summary of Findings, Conclusion and [2] Bhunia, A., Mukhuti, S. S., & Roy, S. G.
Recommendations (2011). Financial performance analysis. A case
Summary of Findings study. Current Research Journal of Social
The following findings were made: Sciences, 3(3), 296-275
1. There is a significant effect of current ratio on [3] Borhan, H., N., Mohammed, R., & Azmi, N.
firm performance (P-value 0.004475 < 0.05) (2014). Impact of financial ratios on the
2. There is a significant effect of Debt-Equity Ratio financial performance of a chemical company:
on firm performance. (p-value 0.00001 < 0.05) The case of Lyondell Basell industries. World
3. There is a significant effect of net profit margin journal of entrepreneurship, management and
on firm performance. (P-value 0.0071 < 0.05) sustainable development. ISSN:2042-5961
Conclusion [4] Carolyne, S. M. (2015). The effect of dividend
The examined the effect of financial ratios on policy on the financial performance of firms
financial performance of brewery companies quoted listed at the Nairobi Securities Exchange
on the floor of Nigeria Stock Exchange. The result of (unpublished MBA Research Project,
the study depict that Nigerian Breweries companies University of Nairobi, Kenya)
are relatively using an optimal mix of debt to equity
which is evident from the significant positive [5] Eljelly, A. M. (2004). Liquidity profitability
relationship of debt-equity ratio with financial trade off: An empirical investigation in an
performance of the manufacturing sector. emerging market. International Journal of
Commerce and Management, 14(2), 48-61
Recommendations
Based on the findings of this study, the researchers [6] Enekwe, C. I., & Okwo, I. M, Ordu, M. M
recommended that: (2013). Financial ratio analysis as a determinant
1. In order to retain a favorable significant effect on of profitability in Nigerian pharmaceutical
financial performance, the management of industry. International Journal of Business and
Nigerian Breweries enterprises should examine an Management, 8(8), 107
appropriate combination of current ratios. [7] Eyenubo, A. S. (2013). The impact of bigger
2. Managers should exercise extreme caution when board size on financial performance for firms:
using long-term debt instruments, attempting to The Nigerian experience, Journal of Research
discover the best and most ideal combination of in International Business and Management,
long-term debt and equity that will have a 3(3), 85-90
beneficial influence on the firm's value.
3. Brewery companies should use debt minimization [8] Freeman, R. E. (1983). Stockholders and
measures to improve their company's success. stakeholders: a new perspective on corporate
governance, California Management Review,
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