Evaluating Banking Profit Performance in Ghana during and post Profit Decline: A five Step Du-Pont Approach
<p>In this study we aimed at three objectives. First, identify and rank banks based on a composite score comprising of all five du-pont variables. Second, we identify variables in the five step du-pont set up that are most likely to influence bank ROE during and post profit declining periods....
| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
| Published: |
University Library System, University of Pittsburgh
2015-11-01
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| Series: | Emerging Markets Journal |
| Subjects: | |
| Online Access: | http://emaj.pitt.edu/ojs/index.php/emaj/article/view/79 |
| _version_ | 1811198650292895744 |
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| author | Baah Aye Kusi Kwadjo Ansah-Adu Albert Agyei |
| author_facet | Baah Aye Kusi Kwadjo Ansah-Adu Albert Agyei |
| author_sort | Baah Aye Kusi |
| collection | DOAJ |
| description | <p>In this study we aimed at three objectives. First, identify and rank banks based on a composite score comprising of all five du-pont variables. Second, we identify variables in the five step du-pont set up that are most likely to influence bank ROE during and post profit declining periods. And third, we estimate a model to capture the variables that drive bank ROE during and post profit declining periods. We first establish from our rankings that, foreign banks in Ghana performed better during profit declining periods while the local banks performed better in post profit decline periods using the top ten banks as a benchmark in both periods. Employing Pearson correlation coefficients matrix, we recognized that operating profit margin, asset turnover and leverage were most likely to influence bank ROE in both time periods. We further employ OLS regression and find that bank ROE was impacted by operating profit margin and leverage during profit declining periods and post profit decline while tax effect added up in post profit declining periods<strong>.</strong></p> |
| first_indexed | 2024-04-12T01:34:47Z |
| format | Article |
| id | doaj.art-021bf1cf8c034ce6b07e710dcb5830cf |
| institution | Directory Open Access Journal |
| issn | 2159-242X 2158-8708 |
| language | English |
| last_indexed | 2024-04-12T01:34:47Z |
| publishDate | 2015-11-01 |
| publisher | University Library System, University of Pittsburgh |
| record_format | Article |
| series | Emerging Markets Journal |
| spelling | doaj.art-021bf1cf8c034ce6b07e710dcb5830cf2022-12-22T03:53:21ZengUniversity Library System, University of PittsburghEmerging Markets Journal2159-242X2158-87082015-11-0152294010.5195/emaj.2015.7963Evaluating Banking Profit Performance in Ghana during and post Profit Decline: A five Step Du-Pont ApproachBaah Aye Kusi0Kwadjo Ansah-Adu1Albert Agyei2UNIVERSITY OF GHANAVALLEY VIEW UNIVERSITYVALLEY VIEW UNIVERSITY<p>In this study we aimed at three objectives. First, identify and rank banks based on a composite score comprising of all five du-pont variables. Second, we identify variables in the five step du-pont set up that are most likely to influence bank ROE during and post profit declining periods. And third, we estimate a model to capture the variables that drive bank ROE during and post profit declining periods. We first establish from our rankings that, foreign banks in Ghana performed better during profit declining periods while the local banks performed better in post profit decline periods using the top ten banks as a benchmark in both periods. Employing Pearson correlation coefficients matrix, we recognized that operating profit margin, asset turnover and leverage were most likely to influence bank ROE in both time periods. We further employ OLS regression and find that bank ROE was impacted by operating profit margin and leverage during profit declining periods and post profit decline while tax effect added up in post profit declining periods<strong>.</strong></p>http://emaj.pitt.edu/ojs/index.php/emaj/article/view/79Du-pont Model, Operating Profit Margin, Asset Turnover, Leverage, Interest burden, Tax Effect |
| spellingShingle | Baah Aye Kusi Kwadjo Ansah-Adu Albert Agyei Evaluating Banking Profit Performance in Ghana during and post Profit Decline: A five Step Du-Pont Approach Emerging Markets Journal Du-pont Model, Operating Profit Margin, Asset Turnover, Leverage, Interest burden, Tax Effect |
| title | Evaluating Banking Profit Performance in Ghana during and post Profit Decline: A five Step Du-Pont Approach |
| title_full | Evaluating Banking Profit Performance in Ghana during and post Profit Decline: A five Step Du-Pont Approach |
| title_fullStr | Evaluating Banking Profit Performance in Ghana during and post Profit Decline: A five Step Du-Pont Approach |
| title_full_unstemmed | Evaluating Banking Profit Performance in Ghana during and post Profit Decline: A five Step Du-Pont Approach |
| title_short | Evaluating Banking Profit Performance in Ghana during and post Profit Decline: A five Step Du-Pont Approach |
| title_sort | evaluating banking profit performance in ghana during and post profit decline a five step du pont approach |
| topic | Du-pont Model, Operating Profit Margin, Asset Turnover, Leverage, Interest burden, Tax Effect |
| url | http://emaj.pitt.edu/ojs/index.php/emaj/article/view/79 |
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