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Exploring the Link between Operational Efficiency and Firms’ Financial Performance: An Empirical Evidence from the Ghana Stock Exchange (GSE)

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Exploring the Link between Operational Efficiency and Firms’ Financial Performance: An Empirical Evidence from the Ghana Stock Exchange (GSE)


Mohammed Musah | Yusheng Kong | Isaac Adjei Mensah

https://doi.org/10.31142/ijtsrd23954



Mohammed Musah | Yusheng Kong | Isaac Adjei Mensah "Exploring the Link between Operational Efficiency and Firms’ Financial Performance: An Empirical Evidence from the Ghana Stock Exchange (GSE)" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-3 | Issue-4, June 2019, pp.842-848, URL: https://www.ijtsrd.com/papers/ijtsrd23954.pdf

The purpose of this study was to explore the link between operational efficiency and the financial performance of non-financial firms listed on the Ghana Stock Exchange (GSE). Specifically, the study sought to determine the association between operational efficiency and the firms’ financial performance as measured by ROA; examine the connection between operational efficiency and the firms’ financial performance as measured by ROE; and to find out the affiliation between operational efficiency and the firms’ financial performance as measured by ROCE. Panel data sourced from the audited and published annual reports of fifteen (15) listed non-financial firms for the period 2008 to 2017 was used for the study. From the study’s Pearson Product-Moment Correlation Coefficient technique of data analysis, operational efficiency had a significantly negative association with the firms’ financial performance as measured by ROA [r= -0.2981, (p=0.0002)<0.05]. Operational efficiency also had an insignificantly adverse relationship with the firms’ financial performance as measured by ROE [r= -0.0411, (p=0.6174)>0.05]. Finally, operational efficiency had an insignificantly inverse affiliation with the firms’ financial performance as measured by ROCE [r= -0.0055, (p=0.9471)>0.05]. In order to have increased levels of financial performance, managers of non-financial firms listed on the Ghana Stock Exchange (GSE) should carefully plan and forecast their activities by taken into consideration, the fluctuations in their operational efficiency. This is because, operational efficiency have been widely proven to have a statistically significant relationship with firms’ financial performance. The firms can also achieve viable operational efficiency by improving their capital base, reducing their operational costs, improving their asset quality, employing revenue diversification strategies as opposed to focused strategies, and by keeping the right amount of liquid assets.

Operational Efficiency; Financial Performance; Ghana Stock Exchange (GSE)


IJTSRD23954
Volume-3 | Issue-4, June 2019
842-848
IJTSRD | www.ijtsrd.com | E-ISSN 2456-6470
Copyright © 2019 by author(s) and International Journal of Trend in Scientific Research and Development Journal. This is an Open Access article distributed under the terms of the Creative Commons Attribution License (CC BY 4.0) (http://creativecommons.org/licenses/by/4.0)

International Journal of Trend in Scientific Research and Development - IJTSRD having online ISSN 2456-6470. IJTSRD is a leading Open Access, Peer-Reviewed International Journal which provides rapid publication of your research articles and aims to promote the theory and practice along with knowledge sharing between researchers, developers, engineers, students, and practitioners working in and around the world in many areas like Sciences, Technology, Innovation, Engineering, Agriculture, Management and many more and it is recommended by all Universities, review articles and short communications in all subjects. IJTSRD running an International Journal who are proving quality publication of peer reviewed and refereed international journals from diverse fields that emphasizes new research, development and their applications. IJTSRD provides an online access to exchange your research work, technical notes & surveying results among professionals throughout the world in e-journals. IJTSRD is a fastest growing and dynamic professional organization. The aim of this organization is to provide access not only to world class research resources, but through its professionals aim to bring in a significant transformation in the real of open access journals and online publishing.

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