Accounting Predictors of Firms’ Growth in Nigeria: The Banking Industry Experience
Abstract
The dynamics of commercial banks' growth in Nigeria has been an issue that has attracted research interest over the years. This study examined the accounting predictors of firms’ growth in Nigeria drawing evidence from the banking industry. A sample of 11 commercial banks listed on the Nigeria Exchange Group was selected for the study. The ex post facto research design was adopted for this study. Secondary data were extracted from the financial statements of the sampled banks for the period of 11 years, which spanned from 2012 to 2022. The Kaiser-Meyer-Oklin (KMO) and Bartlett's Test, Communalities, and Rotated Component matrix were carried out to analyze the study data. The findings of the study indicate that liquidity, specifically; the cash ratio and current ratio are the most significant predictors of commercial bank growth in Nigeria. The study concluded that commercial bank with high liquidity has the most significant growth rate in Nigeria. It was recommended that banks should endeavour to prudently manage and optimize their liquidity positions to ensure and assure sustained growth that will ensure the interest and expectations of their stakeholders.
