Beer
Asian Economic and Financial Review 2(7):741-750
Asian Economic and Financial Review
journal homepage:http://aessweb.com/journal-detail.php?id=5002
AN EXAMINATION OF THE FACTORS THAT DETERMINE PROFITABILITY OF THE NIGERIAN BEER BREWERY FIRMS
THE
Okwo Ifeoma Mary.1 Ugwunta David Okelue2 Agu Sylvia Uchenna. 3 ABSTRACT
This paper examines the internal factors that determine the profitability of the beer brewery firms in Nigeria. An OLS in the form of multiple regressions were applied to annual data generated from the annual statements and accounts of the sampled beer brewery firms covering a period of 2000 to 2011. The correlation and regression results identified the ratios of inventory to cost of goods sold; account receivables to sales; and sales and general administrative expenses to sales to have statistically significant impact on gross profit margin. The paper concludes that the above identified independent variables are the internal factors that determine the profitability of beer brewery firms in Nigeria.
Key Words: Gross profit margin; beer brewery firms; sales; cost of goods sold; inventory; account receivable; sales expenses; general administrative expenses. JEL Codes: M21, M41.
INTRODUCTION
Performance evaluation is the cumulative consideration of factors that may be representative indicators or appraisal of an individual or entity’s activity, or performance in reference to some standards over a period of time. It considers the degree of goal attainment, how items are measured, and what standards are to be applied. Farlex (2010) defines Performance evaluation as the assessment of a manager’s results, which involves, first, determining whether the money manager added value by out-performing the established benchmark (performance measurement) and second,
1 2 3
Department of Accountancy, Enugu State University of Science and Technology, Enugu State, Nigeria. Department of Banking and Finance, Renaissance University Ugbawka,
Asian Economic and Financial Review
journal homepage:http://aessweb.com/journal-detail.php?id=5002
AN EXAMINATION OF THE FACTORS THAT DETERMINE PROFITABILITY OF THE NIGERIAN BEER BREWERY FIRMS
THE
Okwo Ifeoma Mary.1 Ugwunta David Okelue2 Agu Sylvia Uchenna. 3 ABSTRACT
This paper examines the internal factors that determine the profitability of the beer brewery firms in Nigeria. An OLS in the form of multiple regressions were applied to annual data generated from the annual statements and accounts of the sampled beer brewery firms covering a period of 2000 to 2011. The correlation and regression results identified the ratios of inventory to cost of goods sold; account receivables to sales; and sales and general administrative expenses to sales to have statistically significant impact on gross profit margin. The paper concludes that the above identified independent variables are the internal factors that determine the profitability of beer brewery firms in Nigeria.
Key Words: Gross profit margin; beer brewery firms; sales; cost of goods sold; inventory; account receivable; sales expenses; general administrative expenses. JEL Codes: M21, M41.
INTRODUCTION
Performance evaluation is the cumulative consideration of factors that may be representative indicators or appraisal of an individual or entity’s activity, or performance in reference to some standards over a period of time. It considers the degree of goal attainment, how items are measured, and what standards are to be applied. Farlex (2010) defines Performance evaluation as the assessment of a manager’s results, which involves, first, determining whether the money manager added value by out-performing the established benchmark (performance measurement) and second,
1 2 3
Department of Accountancy, Enugu State University of Science and Technology, Enugu State, Nigeria. Department of Banking and Finance, Renaissance University Ugbawka,