Department of Accounting

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    The Impacts of Gearing on Profitability of Manufacturing Companies in Nigeria
    (Journal of Management and Enterprise Development, 2004) Sanni, Micheal Rotimi
    The objective of the study is to examine the impacts of gearing on the profitability of manufacturing companies in Nigeria The researcher employed descriptive statistics to test the profitability of the companies used at case study when geared and un-geared The study reveals the reason for the use of long-term debts (debentures) to include the need to increase the amount of resources available to a company for growth and expansion, the desire to reduce the Weighted Average Cost Of Capital (WACC thereby increasing profitability and capital appreciation, the adoption of agency theory and the need for dynamism among others. Most importantly, there is empirical evidence that the profitability of the three companies used as the case study-Guinness Nigeria Pic The West African Portland Cement Plc and CFAO Nigeria Plc-was better when long- term debts were not used, though the effects vary from one company to another. The shady concludes that gearing has always been a controversial topic both among academics and financial experts and as such projects should be properly evaluated and appropriate source(s) of finance used in order to maximize shareholders' wealth
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    Forecasts in Prospectuses and Actual Performances of Some Selected Nigerian Companies
    (International Journal of Accounting, 2005) Sanni, Micheal Rotimi
    To what extent can one rely on forecasts in prospectuses issued by Nigerian companies? What legal remedies are available to investors/shareholders when directors fail to achieve ich forecasts? In answering these and other similar questions, the paper compared forecasts in the prospectuses of selected Nigerian companies with actual results. The selected companies cover almost all spheres of the Nigerian economy bunking manufacturing, the conglomerates and oil and gas sectors-for different periods. Using paired sample t-tests on key variables like turnover, earning per share and dividend per hart, it was discovered that a greater percentage of the sampled companies failed to meet their forecasts. Since not all long-term strategies are profitable in the short-run potential estors and existing shareholders should not base their investment decisions on profit forecasts alone but should consider other socio-economic and political factors
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    The Challenges Ahead of Polytechnic Academic Staff in the Face of Educational Reform and Consolidation
    (International Journal of Socio- Economic Development and Strategic Studies (JOSEDASS), 2005) Sanni, Micheal Rotimi
    All Federal Polytechnics are to be converted into campuses of proximate universities with the exception of the two oldest and well established ones (Yaba College of Technology and Kaduna Polytechnic), which will transform into City Universities .Why? This paper examines the problems in the tertiary level of education before the reform agenda, the reform agenda itself past reform implications, challenges which the reform poses to Polytechnics academic staff as well as the prospects
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    A Check on Possible Bankruptcy of Companies Quoted on the Nigerian Stock Exchange
    (ECONOMIC INDICATORS. The Nigerian Economic Summit Group, 2008) Sanni, Micheal Rotimi
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    Post Merger Profitability of Oil Companies in Nigeria: A Case Study of Total Plc and Oando Nigeria Plc
    (Journal of Management an International Journal Devoted to the Study of Management and Public Administration (Journal of the Administrative Staff College Of Nigeria), 2008) Sanni, Micheal Rotimi
    Do all Mergers and Acquisitions (M&A) lead to increase in profitability? In finding answers to this and other similar questions, the researchers considered two recent mergers in the oil industry, being the backbone of the Nigerian economy. The mergers are: Total Nigeria Plc/ Elf Nigeria Limited in September 2001 and Unipetrol Nigeria Plc/Agip Nigeria Plc (becoming Oando Nigeria Ple in August, 2001). Using paired sample t-test statistic on Earnings Per Share (EPS) before and after the mergers, it was found that the mean EPS of Total Nigeria Plc increased from 552.25K to 853.50K after the merger. That of Oando Nigeria Plc however decreased from 268.37K to 238,50K. The mean difference of 29.87K (loss) in Oando Nigeria Plc, which is significant at 0.57, is not significant at 5 per cent. The finding negates some earlier research works on the topic while it confirms others.
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    The Impacts of Interest Rates on Bank Deposits, Investments and the Nigerian Economy
    (Journal of Business Administration and Management, 2008) Sanni, Micheal Rotimi
    In theory, interest rate is said to be positively related to bank deposits (savings) while it is negatively related to investments. What this means in effect is that high interest rates encourage savings but discourage investments. And without adequate investment, growth in the economy, as measured by the Gross Domestic Product is retarded. How has the Nigerian economy faired between 1990 and 2004, a period of fifteen years, in the face of changes in interest rates? In finding an answer to this and other questions, the researchers made use of secondary data. Using multi-linear regression analysis, it was found that there is a positive relationship between interest rates and bank deposits. Investments and prevailing interest rates, as expected, are negatively correlated. Though investments depend on prevailing interest rates, the dependence is rather too low, That the economy reacts differently to investments and bank deposits is obvious Other variables that affect the Nigerian economy should be adequately developed
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    Information and Communication Technology Products: Their Gains and Pains on Nigerian Banking System
    (An International Multi-Disciplinary Journal, Ethiopia, 2009) Sanni, Micheal Rotimi
    Year 2006 witnessed a banking revolution in Nigeria as the minimum paid up share capital of Nigerian banks was increased from N2 billion to N25 billion. With it came consolidation and stiff competition among the emerging “mega” banks resulting into investments in ICT. This paper considers the positive as well as the negative sides of some ICT products like ATM, e - banking, e-payment and e-commerce among others. It compares the investment by banks in ICT in the last three-years with the volume and value of banking transactions occasioned by such investment. It also considers savings from forgeries and frauds and concludes that the gains from ICT banking products far outweigh their shortcomings.
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    Short Term Effect of Consolidation on Capital Appreciation of Nigerian Banks
    (Economic & Policy Review, 2009) Sanni, Micheal Rotimi
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    The Influence of the Economy on Hospitality Industry in Nigeria
    (Ethiopian Journal of Environmental Studies and Management, 2009) Sanni, Micheal Rotimi
    In theory, many people patronize the hospitality industry when the economy is buoyant, thereby signifying a positive correlation between the industry and the economy. But is this true of the Nigerian situation? The contributions of the hospitality industry (represented by Hotels and Restaurants) to the Nigerian economy (represented by the Gross Domestic Products – GDP) and the GDP itself from 1980 – 2006 (27 years) were analyzed, using simple regression analysis. Lag variables were introduced in order to safe guard against autocorrelation while white noise heteroscedasticity tests were performed in order to make the conclusions more reliable. It was found that a positive correlation exists between the hospitality industry and the GDP and that the industry depends almost entirely on the economy, thereby confirming a priori expectation. What this means in effect is that for the hospitality industry to continue to be relevant, government must at all times ensure a stable but steadily rising economy
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    Internet Financial Reporting by Commercial Banks in Nigeria
    (Economic & Policy Review, 2009) Sanni, Micheal Rotimi
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    The Influence of Deposits on Loans Granted By Selected Banks in Nigeria
    (2009) Sanni, Micheal Rotimi
    Financial intermediation is one of the primary functions of (commercial) banks and one of the beneficiaries of this function in Nigeria is the manufacturing sub-sector of the economy. But things appear not rosy for this sector of recent and the banks are being blamed for it. Manufacturers complain of lack of inadequate loan facilities from banks to expand their production capacity, Blanks on their own appear helpless as the situation is blamed on deposits received from the surplus unit. Why is this so? How do bank deposits affect loans granted by Nigerian banks? The maturity profiles of bank loans and deposits were arranged along the following lines-under 1 month, 1-3 months, 3-6months, 6-12 months and over 12 months. Using Doubly Multivariate Repeated Measures Design on the maturity profiles of loans and deposits of seven Nigerian banks from 2000-2007, it was found that there is a significant difference in the maturity profiles of the two variables in all the banks examined over the period under review and no significant difference in their linear combinations, What this means in effect is that since: the bulk of bank deposits are of short term duration, manufacturing companies have to look beyond the banking sector to source for their much needed long term loans
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    Stock Prices in Nigeria: The Macro-Economic Variables Involved
    (International Journal of Business and Common Market Studies, 2009) Sanni, Micheal Rotimi
    A lot of literature has been written on the four schools of thought on stock price behaviour. These are; the technical school, the fundamental school, the Efficient Market Hypothesis (EMH) school and the macro-economic school. What are the macro- economic variables that affect stock prices in the Nigerian market? What is their overall effect on stock prices? How does each of them affect stock prices and in which direction? In finding answers to these and other similar questions, the study made use of secondary date of twenty two (22) years (198 2005) obtained from various sources on the macro-economic variables involved. Using multi-linear regression analysis, it was found that interest rate (represented by Minimum Rediscount Rate (MRR), but lately changed to the Monetary Policy Rate by the Federal government), inflation rates, money supply (represented by M2) and exchange rate (Naira/Dollar) collectively account for 96% of stock prices in Nigeria. Though each of the variables affects stock prices differently, the findings here confirm previous works on the topic while it recommended that government should at all times be mindful of the implications of its macro-economic policies on the generality of the people.
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    Short Term Effect of the 2006 Consolidation on Profitability of Nigerian Banks
    (Nigeria Research Journal of Accountancy (NRJA), 2009) Sanni, Micheal Rotimi
    Is there any significant change (increase) in the profitability of Nigerian banks three years after the January 1.2006 consolidation exercise? This paper used Return On Equity (ROE) as a measure of profitability. It examined the ROE of fifteen (15) out of the remaining 24 post consolidation "mega" banks. The banks examined are those that fairly retained their identities before and after the consolidation exercise The three year (2003-2005) pre-consolidation mean of ROE of the banks was compared with the three-year (2006 2008) mean of post consolidation period. Using descriptive (narrative) method and the sample t-test statistic, it was found that there is a significant increase in the profitability of only four of the banks and a significant decrease in the profitability of the rest. The findings here confirm the existing belief in some quarters that new generation banks and the upcoming ones are more aggressive in their profit drive than their old generation counterparts.
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    The Conversion of Federal Polytechnics into Universities: The Funding Aspect
    (An International Multi-Disciplinary Journal, Ethiopia, 2009) Sanni, Micheal Rotimi
    There were only two (2) federally owned universities in Nigeria in 1962. The number increased to 13 in 1975 and went further to 26 in 2008. From the mere 104 pioneer students that enrolled at the University College Ibadan in 1948, the total student enrolment in Federal Universities jumped to 2,754 in 1965, 259,904 in 1998 and 433,871 in 2003. How has funding been over the years? Will the Federal Government be able to cope in area of funding if it carries out its intention of converting all Federal Polytechnics to Universities? The paper traced the history and funding patterns of both University and Polytechnic education right from the inception to the present day, provided reasons for governments reasons for the conversion of the Polytechnics and concluded that the Federal Government definitely has to provide more funds for graduates of Federal Government universities to be accepted as equals of their counterparts in Europe and America.
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    The Effects of the Merger of United Nigeria Textiles Plc and Nichemtex Industries Plc on Profitability
    (Journal of Business Administration and Management, 2009) Sanni, Micheal Rotimi
    Why do companies merge? Why are some mergers successful and others not? What is the effect of the 2001 merger of United Nigeria Textiles Ple and Nichemtex Industries Ple on the overall profitability of the group? In finding answers to these and other similar questions, the paper compares five (5) year pre-merger profitability (represented by Earning Per Share, EPS of hed Nigeria Textiles Ple with five (5) year post-merger profitability. Using paired sample test statistic on EPS before and after the merger, it was found that the mean EPS before the merger was 56.66 Kobo compared with a mere 450 Kobo after the merger. The difference of 51.86 Kobo loss is significant at 0.430, thus making it insignificant at 5 per cent. What this means in effect is that the merger has not resulted into an increased profitability at least in the short run. The finding here is quite in agreement with earlier research works on mergers which revealed that mergers, more of the time, do not result in improved profitability or capital appreciation of the acquirer organizations in the years immediately preceding such mergers
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    A Publication of the Institute of Chartered Accountants of Nigeria: External Auditors' Liability in the 2009 Bank Crisis in Nigeria
    (Nigeria Research Journal of Accountancy (NRJA), 2010) Sanni, Micheal Rotimi
    This paper discusses the duties of an external auditor, the modus operandi of his work, the auditing requirements of companies and the role of management boards. Citing mainly foreign decided cases on auditors' ability to buttress its points, the paper concludes that though there has not been any external auditor that has been dragged to Nigerian court for negligence; it may be difficult to find the auditors liable under the present circumstances. This is because auditors' liability to third parties has been narrowed down with the Caparo case. This notwithstanding, the paper recommends that more reasonable skill and care should be exercised by auditors in order not to further drag their profession into the mud
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    Inflationary Pressure in Nigeria: The Structuralists’ Approach
    (An International Multi-Disciplinary Journal, Ethiopia, 2010) Sanni, Micheal Rotimi
    Opinions differ on the right solutions to inflation in Nigeria. This is due mainly to the fact that while a school of thought sees inflation as a fundamental monetary phenomenon, another school sees it as structural. This paper examined the structural aspect. Structural factors in Nigeria as principal causes of inflation were identified. These structural factors were grouped together under budget deficits, external reserves, and the level of the Nigerian economy (represented by the GDP). Using data on these variables for 32 years (1977 - 2008), and analyzing them with Co- integration and Error Correction Model (ECM), it was found that inflation is 77% affected by structural variables and that the Nigerian economy, as expected, is negatively correlated to inflation while budget deficits and external reserves are positively correlated. All the variables are significant at 5% significant level. The policy implication of the finding is that the supply management of curbing inflation cannot be ignored in tackling inflation in Nigeria
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    Short Term Effect of Consolidation on Profitability of Nigerian Banks
    (An International Multi-Disciplinary Journal, Ethiopia, 2010) Sanni, Micheal Rotimi
    Has the 2006 consolidation of banks in Nigeria led to a significant change in the profitability [Earning Per Share (EPS)] of the banks? This paper examined the EPS of 13 out of the 25 post consolidation ‘mega’ banks. The banks examined are those that fairly retained their identities before and after the consolidation exercise. The three-year (2003-2005) pre consolidation EPS mean of the banks was compared with the three-year (2006-2008) post consolidation period. Using descriptive statistical method, the combined EPS of the banks changed but not significantly at 5% significant level when a paired sample t-test statistical method was used. Three of the banks however stood out. The change (an increase) in the EPS of two of them is significant while the change (a decrease) in the third one is also significant not only at 5% but at 1%. The findings here confirm the existing controversy on whether or not mergers or acquisitions lead to improved profitability. What is however clear is that barring any effect of the present global economic meltdown; it may take some time for the EPS of most of the banks to change significantly.
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