College of Bussines and Economics
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College of Bussines and Economics
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Item ASSESSING THE EFFECT OF CORPORATE GOVERNANCE ON THE INDEPENDENCY OF INTERNAL AUDIT FUNCTION: A CASE STUDY ON ETHIOPIAN PRIVATE COMMERCIAL BANKS(wolkite university, 2021-06-07) ABUBEKER SEFAThe concept of internal audit independence is an area of concern for all commercial banks, it will continue to be an important issue that must be addressed.. Therefore, the study has established how the independence of internal audit is affected by various corporate governance factors among commercial banks in Ethiopia. Data was collected using structured questionnaires distribute to all internal audit department managers, heads of audit and inspection division and risk and compliance officers/managers of the 16 private commercial banks in Ethiopia. Data collected was analyzed by descriptive statistics aided by SPSS version 20 data analysis tool. A regression model was used to analyze the relationship between internal audit independence and level of corporate governance factors within a test of significance of 95% confidence level. The study has revealed that there is positive linear relationship between independence of Internal audit function and the corporate governance factors; corporate governance setting (CGS), senior management support (SMS),effect of Remuneration committee(ERC),effect of Qualification and Experience of internal audit staff(EQEIAS)), Effectiveness of audit committee (EAC)) and Perception of Internal audit independence (POI) among private commercial banks in Ethiopia. The results of this study can inform bard of directors on the extent to which important factors factor are considered in the establishments of corporate governance they help the independency of internal audit.Item IMPACT OF WORKING CAPITAL MANAGEMENT ON PROFITABLITY: EVIDENCE FROM SELECTED MANUFACTURING COMPANIES IN SNNPRS, ETHILOPA(wolkite university, 2019-05-08) Abiyot Gossaye TekaWorking capital management is the administration of current assets and current liabilities and it is directly affects the liquidity and profitability of company. Hence, efficient working capital management involves excessive planning and controlling and it is very important to equalize between current assets and current liabilities to eradicate the risk of insolvency. The objective of this study is to examine the impact of working capital management on firms’ profitability and review the statistical significance between components of working capital management. In light of this aim the thesis implement quantitative method of research approaches to test the study hypothesis. Hence, the study used survey of companies audited financial statements. The purposive sampling method was used. Consequently, the study selected a sample of 11 companies for the period of eight years (2010-2017). Data was analyzed on quantitative basis using descriptive and regression analysis (Pooled ordinary least square) method was used. It observe the components of working capital for instance accounts receivable management, inventory holding period, accounts payable period, and cash conversion cycle in relation to ROA. In addition the study observes current ratio, company size, company growth and debit ratio as control variables. The key results from the study are; a negative significant at 5 percent relationship between account receivable management and profitability. Cash conversion cycle have a negative and statically significant at 5 percent relation with profitability. Opposed to the research hypothesis, account payable period has a negative statically significant at 5 percent relation with profitability. The manufacturing company of SNNPRS, Ethiopia managers can increase profitability of their firms by limiting the time gap between a company’s expenditure for purchases of raw materials and the collection of sales of finished goods. In general the study recommended that firms should minimize working capital management components in order to maximize profitability.Item Factors Affecting Internal Audit Effectiveness in Governmental Sectors: Case Study in Guraghe Zone(wolkite university, 2019-06-09) Abidlemewella BedewiThe main purpose of this study was investigating factors affecting internal audit effectiveness in governmental sectors in guraghe zone, SNNPRS. As a result, the study used 13 randomly selected sectors (four out of eleven regional sectors with IA work process, one & the only federal sector and eight out of fifteen zonal sectors with IA work process) out of purposively selected 27 governmental sectors that have IA work process. The sectors were stratified into three strata (federal government, regional government and zonal government related sectors). Simple random sampling was applied on each stratum to get sectors that were used to form the sample size. Distributing two types of prepared questionnaire to 128 top management & IA, primary data was collected from 116 respondents (response rate 90.625%). Descriptive statistics & OLS multiple linear regression to measure IAE and to identify factors affecting IAE were applied respectively. Internal audit independence, management support, adequate and competent internal audit staff, sufficiency of budget, level of objectivity, approved IA charter, unrestricted information access and professionally competent team leader were hypothesized factors to be investigated and all of these factors were expected to have positive and significant impact on IAE. Out of these eight factors, internal audit independence, sufficiency of budget and unrestricted information access, were factors identified to have positive and significant contribution to IAE & internal audit independence was identified to be the most important deriver of IAE. But management support, level of objectivity, approved IA charter and professionally competent team leader were investigated to have insignificant positive contribution to IAE. Beta sign to adequate and competent internal audit staff showed that the variable has negative and insignificant contribution to IAE. Regression output of the analysis showed that 62.3% of the study is explained by the model and it showed that all of the variables collectively could play very important role to contribute for IAE.Item Determining Factors of Liquidity of Private Commercial Banks in Ethiopia(wolkite university, 2019-03-07) Abenezer TesfayeThis study intended to examine the determinants of Liquidity in Private Commercial Banks in Ethiopia. In view of that, this study determined the bank specific and macro-economic factors affecting bank liquidity for Six Private commercial banks in Ethiopia, covering the period of 2000-2017 by using balanced fixed effect panel regression. The findings of the study showed that capital adequacy, and inflation had statistically significant and positive relationship with banks’ liquidity. Bank size had a negative and statistically significant impact on Private Commercial banks .Loan growth had positive and statistically insignificant impact on Private Commercial banks. GDP growth rate has statistically insignificant and positive influence on the liquidity of private commercial Banks. Inflation had positive and significant impact on banks liquidity. On the other hand, the results of the study profitability were quite surprising. The result is conflicting with researcher’s expectations and also a finance theory which emphasizes the negative correlation of liquidity and profitability. Moreover, the coefficient of profitability was not statistically significant, implying that its Influence is insignificant. This positive relation shows that, higher profitability leads to increase banks liquidity. Conclusion about the impact of Ethiopian bank’s profitability on liquidity remains ambiguous and additional investigation is required. The researcher recommended that to maintain adequate system for managing liquidity of private commercial banks in Ethiopia.Item ASSESSMENT OF FACTORS AFFECTING LOAN REPAYMENT PERFORMANCE IN OMO – BANK (IN THE CASE OF WOLKITE BRANCH)(wolkite university, 2023-06-08) ABENEZER TEKACommercial banks have a significant role in the development of one’s country’s economic development by providing credit and also a saving service for those productive clients. Though there are many factors that can affect the efficiency of the institution like, loan management and processing system, cash management, and loan repayment performance. This study was conducted with the aim of analyzing the factors that influence Banks loan repayment performance, specifically in omo bank in Wolkite town using primary data collected through a self-administered questionnaire. This study intends to assess the factors affecting the loan repayment performance of the beneficiaries of omo bank. In order to achieve this objective, the study was adopted a mixed research approach. Primarily data were collected from 20 institution employees holding different positions with using a self-administered questionnaire. For the data analysis, descriptive statistics including percentages, median and standard deviation were used to assess or described the phenomena that influence repayment rates.Item Assessment of Tax Collection Problem (In Case Study of Wolkite Town)(wolkite university, 2023-03-08) Abel AndualemThis study focused on problems related to tax collection in Wolkite Town. It is known that the existence of a state without tax is unthinkable because of government refunds from taxation. So studies of problems associated with tax collection and finding appropriate solutions may help to contend with development constraints successfully through a detailed investigation. Because of this, this study designed and looked at the problems related to tax collection in Wolkite Town. With the key objective of assessing problems related to tax collection. This may help the Town revenue and tax office to look at originated problems. To conduct this study both primary and secondary data will be collected. The primary data is collected by using questionnaires from taxpayers, employees of the revenue bureau, and personal interviews with the manager of the bureau. The secondary data was collected from the previous year’s reports of the bureau, from different books, and related published materials. To conduct this study questionnaires were distributed to 99 taxpayers and 15 questionnaires were distributed to employees of the revenue bureau. In addition to this, different opinions were collected from the manager of the office and the previous year’s report of the office.Item FINANCIAL INCLUSION AND DETERMINANT FACTORS IN GURAGHE ZONE(wolkite university, 2023-03-08) ABEBE BERKITThe role of financial inclusion in the economic and financial discourse has gained a lot of interest both among academia and practitioners. The discussion has further received attention from development partners such as the World Bank, International Monetary Fund, G20 and AFDB among others. The objective of the current study is to evaluate determinants of financial inclusion in Ethiopian focusing on gurage zone. The study used an explanatory research design and quantitative research methods. The research was conducted in four woredas and two town administrations in the gurage zone. A sample of 384 respondents was selected using multistage sampling techniques. 384 questionnaires were distributed, 371(97%) were fully completed, and 13(3%), were returned incomplete. therefore the current study used the full response only to analyze the data (i.e. 97percent) of the respondents who participated in the study. The responses were evaluated with descriptive statistics and probit regression analysis using stata12. The study revealed that except for occupation, all variables had a statistically significant impact on financial inclusion. Age, education, income, place of residence, financial literacy, marital status, and trust in financial institutions are positive and significant factors in financial inclusion, whereas Gender, distance, documentation, and religion have a negative and significant effect. Finally, all variables with a negative sign reduce financial inclusion in the research area. As a result, the researcher recommended that policymakers, governments, financial institutions, and development organizations take into account the aforementioned financial inclusion elements in their attempts to address the problem of financial exclusion and combat poverty among certain segments of the population.Item THE EFFECT OF RISK MANAGEMENT ON FINANCIAL PERFORMANCE: A STUDY ON MICRO FINANCE INSTITITUIONS (MFIs) IN ETHIOPIA(wolkite university, 2022-03-07) Abdulnure ahmedamirIn the aftermath of the global financial crisis, risk management became a major area of focus for the financial sector. This study was aimed to examine the effect of risk management on micro finance institutions financial performance in the context of Ethiopia. Financial performance indicator (Return on assets) is used as the dependent variables while credit, liquidity, operational, interest rate, and exchange rate risk were used as proxies for risk management. The study target population was all 42 micro finance institutions in Ethiopia and the study covered a period of 12 years from 2010 to 2021. To this end, the study adopts quantitative approach. Time Series Cross-Sectional balanced secondary panel data was analyzed. The data was obtained from published financial statements of accounts of eighteen (18) micro finance institutions in Ethiopia. Descriptive statistics, correlation, and regression analyses were applied to analyze the data. The results from regression analysis showed that Credit Risk, Interest Rate Risk and Operational Risk were have a positive and statistically significant effect on financial performance, while foreign exchange rate risk has a statistically significant and negative influence on the financial performance of the Ethiopian micro finance institutions. Based on the panel regression approach, the study concluded that the risk management variables considered in this study was a key factor in affecting the financial performance of micro finance institutions in Ethiopia. Thus, it suggested that Ethiopian micro finance institutions should maintain a proper balance between risk management practices and financial performance by engaging in appropriate credit, operational, interest rate and foreign exchange risk management practices that will ensure safety for their micro finance institution and yield positive profits.Item THE EFFECT OF WORKING CAPITAL MANAGEMENT ON FIRM‟S PROFITABLITY: EVIDENCE FROM SELECTED MANUFACTURING COMPANIES IN ADDIS ABABA ETHIOPIA.(2021-01-07) ABDULAZIZ BEREDAThe main purpose of this study was to determine empirically the impact of working capital management on profitability. To indicate relationship between these two, the author collected secondary data from 19 manufacturing companies in Addis Ababa, Ethiopia for the period of 2015 to 2019. Inventory holding period, Accounts receivable period and accounts payable period are used as independent working capital policy variables. However, cash conversion cycle (CCC) and current assets to total assets ratio are used as comprehensive measures of working capital investment policy. On the other hand, current liabilities to total assets ratio is used as measure of working capital financing policy. The regression results show inverse relationship between inventory holding periods and accounts receivable with profitability. However there is statistically insignificant relationship between accounts payable period and profitability. The results also show that there exists significant negative relationship between profitability of the sampled firms and cash Conversion cycle (CCC). In hence to that there is significant positive relationship between current assets to total assets ratio and profitability measures has been observed. The other hand, results show that a significant positive relationship between current liabilities to total assets ratio and profitability. To be profitable, firms must try to keep these numbers of days account receivable and inventory turnover days to minimum level. This also helps to minimal the cash conversion cycle (CCC). Since aggressiveness of working capital management investment policies is inversely related to profitability, and aggressive investment policy positively related with profitability, the financial managers of manufacturing Companies should follow conservative investment policy and aggressive financing policy in their working capital management in manufacturing companies. Data and Data Collection to gather the necessary data copies of audited financial statements in the form of income statement and statement of financial position over the period of five years has been use. The population of study will comprised 19 manufacturing share companies in Addis Ababa Ethiopia. The E – views-9 software has been used to analyse financial data and Researcher used panel Least Squares methods for analysis.Item Factors affecting FINANCIAL PERFORMANCEOF COMMERCIAL BANKS in ETHIOPIAN(Wolkite University, 2024-09-03) ABDRAHMAN DULAThis study investigates factors affect the financial performance of commercial banks in Ethiopia. The primary objective is to examine how various factors impact bank performance. A mixed methods approach was employed, utilizing both quantitative and qualitative data. The study utilized secondary data obtained from annual reports of selected commercial banks and the National Bank of Ethiopia for a period of 7 years (2017-2023). The study assessed the relationship between selected corporate governance variabls, and bank performance as measured by ROA. Additionally, primary data was collected through structured questionnaires distributed to board secretaries and senior management of sampled banks. The data were analyzed using descriptive statistics, correlation analysis, and panel data regression techniques. The findings reveal significant associations between corporate governance variables and financial performance measures. Specifically, board size and the existence of audit committees were found to have negative impacts on financial performance, suggesting potential inefficiencies in decision-making processes and bureaucratic constraints. Conversely, higher levels of capital adequacy and capital ratios were positively correlated with improved financial performance, highlighting the importance of maintaining adequate capital reserves to support stability and resilience. However, loan to deposit ratios did not exhibit a significant impact on financial performance, suggesting the need for further investigation into lending practices and liquidity management strategies. Recommendations for future research include longitudinal studies to assess the long-term effects of corporate governance reforms, comparative analyses across industries or regions, and qualitative investigations into the underlying mechanisms driving governance-performance relationships. Additionally, exploring the role of emerging technologies in governance effectiveness and financial performance could offer innovative avenues for future inquiry in the Ethiopian banking sector. Overall, these findings provide valuable insights for policymakers, regulators, and banking stakeholders aiming to enhance corporate governance practices and optimize financial performance in Ethiopia's banking industry.