Profitability and Shareholders’ Investment of Deposit Money Banks in Nigeria
Keywords:
Profitability, Shareholders’ Investment, Return on Asset, Return on Equity, Return on InvestmentsAbstract
The study examined the relationship profitability and shareholder’s investment of Deposit Money Banks in Nigeria. The study was aimed determining the relationship between return on asset, return on equity, net profit margin and share price of Deposit Money Banks in Nigeria. The data was analyzed using the process of systematically applying statistical or logical techniques to describe, illustrate and evaluate data. Ordinary least square (OLS) regression statistical method was adopted in the test of hypothesis through the use of SPSS. The test of hypothesis shows that; That there is a negative and insignificant relationship between return on asset and share price of Deposit Money Banks in Nigeria, similar, a negative and insignificant relationship between return on equity and share price of Deposit Money Banks in Nigeria and furthermore, the study provides evidence of a negative and insignificant relationship between net profit margin and share price of Deposit Money Banks in Nigeria. Therefore, it is recommended that; it is suggested that further research could address other financial ratios and even for a longer period of time. A study on the combine effects of these ratios, as against the effects of individual ratios, is also recommended. The study is only on the Deposit Money Banks in Nigeria; a clearer picture would be established in other sectors in Nigeria are studied. Lastly, changes in share price are functions of many factors including macro-economic variables. This study therefore only gives a partial analysis, hence a study on a wide analysis is recommended.
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