Authors:
Barisua Akpeekon, Ledibabari Paago
Addresses:
Department of Accountancy, Ken Saro-Wiwa Polytechnics, Bori, Rivers State, Nigeria. Department of Accountancy, Ignitus Ajuru University of Education, Port Harcourt, Rivers State, Nigeria.
Abstract:
This study examines the impact of leverage on the earnings quality of listed manufacturing companies in Nigeria. The purpose of this study is to examine the effect of the equity ratio on the earnings per share (EPS) of listed manufacturing companies in Nigeria and to determine its impact on the dividend yield (DVY) of these companies. Using a balanced panel dataset from the annual reports of selected companies between 2013 and 2019, the study employs panel estimation techniques based on the Generalised Method of Moments (GMM) and analyses them in E-Views. The primary objective is to investigate how leverage indicators, such as the equity ratio (ER) and dividend yield (DVY), impact earnings per share (EPS), which serves as a proxy for earnings quality. The empirical results reveal that both the equity ratio and dividends have a significant impact on earnings per share for the surveyed manufacturing companies. Specifically, a higher equity ratio is associated with improved earnings quality, while the dividend yield also shows a positive correlation with earnings development. Based on these findings, the study recommends that policymakers take decisive action to improve Nigeria's macroeconomic environment. These measures are crucial for encouraging investment and maintaining profitability in the manufacturing sector.
Keywords: Earnings Quality; Manufacturing Firms; Annual Report; Dividend Yield; Generalised Method of Moments; Equity Ratio; Earnings Per Share; Encourage Investment; Maintain Profitability.
Received: 05/07/2024, Revised: 22/09/2024, Accepted: 02/11/2024, Published: 03/03/2025
DOI: 10.64091/ATISL.2025.000142
AVE Trends in Intelligent Social Letters, 2025 Vol. 2 No. 1 , Pages: 13-26