Abstract
The study ascertained the effect of Financial Factors on Shareholders’ Value of listed ePharmaceutical Firms on Nigeria Stock Exchange. The study ascertained the effect of Sales Revenue (SR), Investment in Working Capital (IWC) and Operating Profit Margin (OPM) on Earnings Per Share (EPS) in the pharmaceutical firms in Nigeria. Data for the study were sourced from Annual report of the sampled pharmaceutical firms. The data collected were analyzed using Eview. The results of the study show that Sales Revenue (SR) has a positive and significant effect on Earnings Per Share (EPS) of Nigeria pharmaceutical firms; investment in working capital (IWC) has a negative and insignificant effect on Earnings Per Share (EPS) of Nigeria pharmaceutical firms and Operating Profit Margin (OPM) has a positive and significant effect on Earnings Per Share (EPS) of Nigeria pharmaceutical firms. Based on the findings, the study recommends among others that Pharmaceutical firms in Nigeria should employ more of sales strategies in other to generate more sales for the firms to enhance returns to the owners of the business, the shareholders.
Highlights
The result of hypothesis two shows that investment in working capital (IWC) has a negative and insignificant effect on Earnings Per Share (EPS) of Nigeria pharmaceutical firms, this is in line with the study of Mohamed (2016) who examined the association between the efficiency working capital and firm’s value for a sample of 49 firms registered on Karachi Stock Exchange for the period of 1994-2005 [47]
The third hypothesis revealed that Operating profit margin (OPM) has a positive and significant effect on Earnings Per Share (EPS) of Nigeria pharmaceutical firms
This study examined the effect of capital structure on the earnings per share of Pharmaceutical firms in Nigeria
Summary
A company creates value for the stakeholders when the shareholders’ returns exceed the cost of capital. Maximizing shareholders’ wealth through the creation of value to a company’s market share price is currently recognized by academics and practitioners as the performance indicators of any profit oriented organization. Pareek (2003) identified shareholder’s value as total benefit to shareholders for investing in a company [2]. Creating values for investors was further affirmed as delivering consistently high return on capital [3]. Pareek (2003) observed that investors look to capital appreciation as the prime motivation for investing in a company. This means that the concept of value creation essentially examines the value attributed to the shareholders of a company
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