FINANCING DECISIONS AND SHAREHOLDERS’ VALUE CREATION OF CONSUMER GOODS MANUFACTURING COMPANIES IN NIGERIA

https://doi.org/10.5281/zenodo.10912469

Authors

  • Edeh, Ijeoma Thelma Department of Accountancy, Faculty of Management Sciences, Enugu State University of Science and Technology Enugu, Enugu State, Nigeria
  • Prof. Chike Ernest Nwoha Department of Accountancy, Faculty of Management Sciences, Enugu State University of Science and Technology Enugu, Enugu State, Nigeria
  • Dr. Cyprian Okey Okoro Head, Project Financial Management Unit, Office of the State Accountant General, Enugu.

Keywords:

Financing Decisions, Shareholders’ Value Creation, Consumer Goods, earnings per share

Abstract

The main objective of this study was to verify the effect of financing decision on shareholders’ value creation of consumer goods manufacturing companies in Nigeria. The specific objectives were to: (i) ascertain the effect of equity issues on earnings per share of consumer goods manufacturing companies in Nigeria; (ii) evaluate the effect of securities on earnings per share of consumer goods manufacturing companies in Nigeria; (iii) determine the effect of trade payables on earnings per share of consumer goods manufacturing companies in Nigeria; and (iv) verify the effect of retained earnings on earnings per share of consumer goods manufacturing companies in Nigeria. Secondary data for the period of 10 years (2013-2022) were sourced from the 5 top performing consumer goods company in Nigeria, namely, International Breweries, PZ Cussons, Champion Breweries, Cadbury Nig., and Guinness Nig. The study employed the ex-post facto research design and analysis was done using multiple regression estimation. The findings showed that equity issues, securities, trade payables and retained earnings did not have significant effect on shareholders’ value creation of consumer goods manufacturing companies in Nigeria during the period. The outcome has added knowledge to this phenomenon because it achieved the objective of the study being that it proved empirically that financing decision had no significant effect on shareholders’ value creation of consumer goods manufacturing companies in Nigeria during the period. The study recommended that: (i) Equity shares of consumer goods companies should be improved so as to enlarge the possibility of having shareholders’ value creation in the future; (ii) Companies securities like stock, long-term debts and debentures should not be encouraged since they are capable devaluing firms’ Networth and reducing shareholders’ value over the years; (iii) Management of consumer goods manufacturing companies should cut down on trade payables and focus on effective and efficient management of available finances and production budget; and (iv) Retained earnings should be judiciously used and adequate provisions be employed in areas that will likely improve internal sources of finance. This will reduce indebtedness and translate to higher profits in the future

Published

2024-04-03

How to Cite

Edeh, I. T., Nwoha, C. E., & Okoro, C. O. (2024). FINANCING DECISIONS AND SHAREHOLDERS’ VALUE CREATION OF CONSUMER GOODS MANUFACTURING COMPANIES IN NIGERIA. SADI International Journal of Management and Accounting (SIJMA), 11(2), 1–18. https://doi.org/10.5281/zenodo.10912469

Issue

Vol. 11 No. 2 (2024): April-June

Section

Original Peer Review Articles
Copyright & Licensing

Copyright (c) 2024 SADI International Journal of Management and Accounting (SIJMA)

Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.

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