Impact of Earnings Performance on Financial Stability of Selected Banks in Nigeria
- February 12, 2021
- Posted by: RSIS Team
- Categories: Accounting, IJRISS
International Journal of Research and Innovation in Social Science (IJRISS) | Volume V, Issue I, January 2021 | ISSN 2454–6186
Impact of Earnings Performance on Financial Stability of Selected Banks in Nigeria
Yakubu, Bala Zakari
Department of Accountancy
Nasarawa state Polytechnic, Lafia
ABSTRACT
This paper assesses the impact earnings performance indicators on the financial stability of banks in Nigeria. The study area composed of twelve selected deposit money banks listed on Nigerian Stock Exchange (NSE) covering the period of five years from 2014 to 2018. Description statistics was used to analyse the study variables, whereas correlation technique has been utilized to evaluate the impact of firm earnings performance on the financial stability of the banks. It is found that there is sturdy link between the firms’ earnings performance and the financial stability. It is additionally reveal that share worth of Banks in Nigeria be explained more considerably by the amount further than the banks’ ancient measures of earnings.
Keywords: Earnings performance, Economic value added, Earnings per share, Financial stability.
INTRODUCTION
The earnings information indicates the extent to which a corporation engaged in worth additional activities over a given period of time. It conjointly shows the signal of direct resource allocation within the capital market. In determining the attractiveness of a particular stock, investors and financial analyst usually give emphasis to earnings as they indicate the expected future dividends and the future growth as well as the expected capital appreciation of a given corporation. The present worth of future earnings determines the worth of company’s stock. Thus, corporations with good earnings prospects can generally have the next market share value than those with poor earnings. The ability of a firm to generate profit in the future plays a significant role in its stock price determination. The firm’s value has a direct relationship with its future earnings, hence the executives should be able to comprehend their effects on accounting and they should be able to manage their earnings so as to make the best possible decisions for the company (Rahman, Moniruzzaman & Sharif, 2013).
