Accounting and Auditing

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The Implication of the upcoming capital market on Ethiopian Commercial Banks
(A.A.U, 2024-06-04) Melktu Geremew; Advisor: Degefa Duressa (PhD)
This thesis explores the potential implications of the upcoming capital market on Ethiopian commercial banks. The research aims to identify the potential benefits and challenges that can arise from the introduction of the capital market for these banks. Using descriptive research design and content analysis method was employed, the study focused on five purposively selected banks: Awash Bank, Dashen Bank, Abyssinia Bank, Hibret Bank, and Zemen Bank. The findings suggest that the capital market can bring about several benefits, including improved risk management, access to long-term financing, and a wider range of funding sources. Additionally, it can lead to operational streamlining, innovation, and the evolution of commercial banks into comprehensive financial institutions. However, the introduction of the capital market also poses challenges, such as exposing skill and technological gaps, and introducing new risks associated with new financial instruments. To capitalize on the opportunities presented by the capital market, the researcher recommends that commercial banks invest in staff training, technological advancement, and diversification of their services to meet the needs of the capital market.
An Assessment of Project Monitoring and Evaluation Practices: The Case of International NGOs
(A.A.U, 2024-06-04) Getinet Teferi; Temesgen Worku (PhD)
Monitoring & Evaluation (M&E) is a systematic process used to track and assess the progress, performance, and outcomes of projects, programs, or initiatives. This method involves the continuous collection, analysis, and interpretation of data to ensure that objectives are being met efficiently and to provide insights for informed decision-making. Monitoring & Evaluation (M&E) play a pivotal role in the success of development projects, allowing project managers to track progress, identify challenges, and make informed decisions. This study focuses on assessing the project monitoring and evaluation practice in five international NGOs (Action Against Hunger (ACF), Population Service International (PSI), Zionist Organization of America (ZOA), Jhpiego (Johns Hopkins Program for International Education in Gynecology and Obstetrics), and Fintrac (Feed the Future Value Chain Activity) operating in Ethiopia. By assessing the monitoring and evaluating practices and project performance, the research aims to contribute to a better understanding of achieving optimal project results. The study employed a census sampling method to collect primary data through questionnaires and interviews. Participants included program managers, program staff, finance managers, finance staff, M&E managers, and directors who worked more than a year in the organization. Out of the 70 distributed questionnaires, 67 were properly filled in and returned. The collected data was analyzed using SPSS, and the results were presented using tables. Findings revealed that the international NGOs involved relevant stakeholders, including beneficiaries, government, donors, and the community, in their M&E activities. However, the gap in practicing & implementing effective M&E systems were identified, such as limited resources in terms of funding, staff, and technical expertise. In conclusion, while the international NGOs have well-established M&E systems, improvements are needed in certain areas. Recommendations include clarifying the extent and objective of the of the M&E (Monitoring and Evaluation) system, providing adequate time and training for project staff, enhancing technical capacity in M&E tools, allocating sufficient budget to the M&E department, involving all stakeholders in M&E practices, ensuring the engagement of top management, and utilizing M&E evaluation reports to monitor project progress.
Factors that Affect Loan Repayment Performance of Ethiopian Commercial Banks: Evidence From Addis International Bank S.C in Addis Ababa
(A.A.U, 2024-06-22) Wube Tsige Alemu; Mehari Mekonnen (Phd)
The main purpose of the study was to investigate factors that affect loan repayment performance of Addis international Bank S.C in Addis Ababa. To this end factors that affect loan repayment performance of banks on both the borrower and bank side is identified. To arrive at an appropriate conclusion about the issue under study the researcher used descriptive and explanatory research design with quantitative and qualitative research approach. The study also used both primary and secondary data. Primary and secondary data was collected using questionnaires and through verifying documents respectively. From the total population of the study targeted, sample size was determined considering the bank employees and borrowers as strata (using stratified sampling technique). To determine the sample size, the researcher used the Yamane’s formula The total population of the study was 597 which include 500 borrowers and 97 employees and the total sample size is 240. In this study the data obtained from borrowers and the bank was analyzed using Binary regression model was used to measure the variables those are factors that affect loan repayment performance of Addis bank in Addis Ababa. Data were analyzed using statistical Software for Data science (STATA). A total of Twelve explanatory variables representing three dimensional namely institutional factors, loan factors and borrower factors considered to analyze loan repayment performance. Based on the findings of this study, the researcher concludes that Educational level, repayment period, Loan supervision, interest rate, loan size, saving culture, loan processing time and collateral have found to be significant effect on loan repayment performance of housing finance. On the other hand, loan follow-up, marital status, income from other sources and loan diversion have found to be insignificant effect on loan repayment performance. Finally, possible recommendations were suggested that, the bank might consider the significant variables such as Educational level, repayment period, Loan supervision, interest rate, loan size, saving culture, loan processing time and collateral to minimize loan default rate.
Challenges and Benefits of Implementing Expected Credit Loss Model For Microfinance Institutions in Ethiopia: Case Study on Some Selected Microfinances
(A.A.U, 2024-02-13) Bithania Mamo; Abebaw Kassie (PhD)
According to Financial reporting proclamation 847/2014 ratified by House of people representative, both public and private interest entities were required to prepare their financial report in accordance with International Financial Reporting Standard. Pursuant on the proclamation issued financial Institutions adopted IFRS9 along with other standards. The new standard introduces the expected credit loss model, which is the new impairment model, to allow for up-to-date recognition of credit losses, estimated not only on the actual credit loss, as well as details on the present loan portfolio's prospects. The primary goal of this study was to investigate the challenges and benefits associated with implementing the International Financial Reporting Standard 9 (IFRS 9) Expected Credit Loss Model. Even though the purpose of ECL implementation is to simplify existing rules and increase investor confidence in financial institutions' financial statements, financial institutions confront numerous challenges during implementation. In order to achieve its goals descriptive research design is implemented along with non-probability purposive sampling. Both primary and secondary data gathering approaches are employed to answer the study questions and fulfill the research's goal. The study assessed five microfinance institutions on their implementation of expected credit loss. The research finds that lack of skilled personnel, inadequate data collection and management systems, challenges in obtaining reliable forward-looking information, difficulty in forecasting the expected cash flows of various assets, difficulties in developing suitable models for classifying loans, IT infrastructure related challenges, External challenges are identified as major challenge. This finding recommends the need for Data management systems, implementation of technology and tools, regular ECL model development and validation, Incorporation of scenario analysis and forward looking information, Staff training and Collaboration with external parties are proposed in order to minimize the challenges the institutions are facing.
Factors Affecting External Auditor’s Independence in Ethiopia: in Case of Private Audit Firms in Addis Ababa
(A.A.U, 2024-06-02) Selamawit Dereje; Habtamu Berhanu (PhD)
This study was examined factors affecting External auditors’ independence in Ethiopia with reference to external private audit firms in Addis Ababa. The researcher employed mixed research approach with explanatory research design where the effect caused by the independent variable on the dependent variable is observed through descriptive, inferential and regression analysis. Primary data was collected through structured questionnaire from 99 auditors of private audit firms. Accordingly, the result of descriptive, inferential and regression analysis showed that size of audit firm, audit tenure, provision of non-audit service, audit firm age, management support and information technology have positive and statistically significant effect on external auditors’ independence. Based on the findings of the study, the researcher recommended audit firms to rotate their auditors periodically, provide assessment and training programs, audit managers to assess auditors’ independence during audit engagement period, audit firms to cope-up with existed and upcoming standards and technologies and the concerned government body to make restriction on provision of non-audit service in order to improve auditors’ independence.
Effect of Total Quality Management Practice on Organization Performance: the Case of Dashen Bank
(A.A.U, 2024-06-24) Menbere Wabi; Temesgen Worku (PhD)
The purpose of this study was to examine the effect of total quality management practices on the organizational performance of Dashen Bank. The study focused on five independent variables such as top management commitment, customer focus, employee empowerment, continuous improvement and process approach. The study used quantitative research approach and explanatory research design to objectively answer the research questions. The researcher used simple random sampling technique in order to choice respondent from the population and distribute 135 structured questionaries. Then the data were coded through SPSS software and analyzed via descriptive and inferential statistics of correlation and regression analysis. The finding of multiple regression analysis showed that the top management commitment, customer focus and continuous improvement had significant positive impact on organization performance. The employee empowerment had insignificant negative impact on organization performance and the process approach had insignificant positive impact on organization performance. Finally, on the basis of the research findings, suitable recommendations along with inferences for further studies have been forwarded. The recommendations take assessment of employee training need and opportunity for improvement of to deliver quality service and increase organization performance
Impact of Inventory Management on Operational Performance of Ethiopian Pharmacuticals Manufacturing Companys on Case of Cadila Pharmaceuticals (Ethiopia) P.L.C
(A.A.U, 2024-06-24) Samuel Daniel; Sewale Abate (PhD)
This study investigates the impact of inventory management practices on operational performance at Cadila Pharmaceuticals (Ethiopia) P.L.C. (CPEL), emphasizing their crucial role in organizational improvement and achieving high levels of customer satisfaction. Primary data was gathered through questionnaires and interviews, complemented by secondary data from document evaluation. Adopting an Explanatory research design facilitating both qualitative and quantitative data analysis, the study distributed 56 questionnaires and employed descriptive statistics to analyze results. Correlational analysis and regression were conducted to explore relationships between independent variables (e.g., Material Requirement Planning [MRP], Distribution Resource Planning [DRP], Vendor Managed Inventory [VMI], Just in Time [JIT] System) and the dependent variable (operational performance), revealing statistically significant findings. The research highlights that CPEL has not fully implemented inventory management systems and recommends further investigation into factors influencing their adoption to enhance manufacturing companies' performance in Ethiopia.
The Effect of Digitalization on Bank Profitability: The Case of Selected Private Banks in Ethiopia
(A.A.U, 2024-06-05) Nitsuh Asheber Enyew; Laxmikantham Padakanti (PhD)
This study was conducted to investigate the impact of digitalization on the profitability of selected private banks in Ethiopia. The study employed a quantitative research approach, which relies on numeric data to test hypotheses and draw conclusions. An explanatory research design was adopted variables. To select the sample, a purposive sampling technique was utilized. In this case, banks were chosen from a list according to specific characteristics relevant to the research questioned, employing descriptive statistics, ordinal regression, and Spearman rank correlation to assess the relationship between these variables and bank profitability. The primary method of data collection was made using 5 points Likert scale questionnaire. Importantly, ATMs, point of sale terminals, mobile banking, and mobile wallets exhibited a highly significant impact on profitability, with p-values of 0.000. This study suggests that these channels play a crucial role in driving financial success for Ethiopian private banks. However, internet banking, despite showing a positive correlation, did not demonstrate a statistically significant impact on profitability. The result of this study shows the need for banks to re-evaluate their Internet banking strategies, potentially focusing on optimizing existing functionalities and ensuring seamless integration with other digital channels. By addressing these areas, banks can unlock the full potential of Internet banking and maximize its contribution to overall profitability. Banks should prioritize investment in ATMs, POS terminals, mobile banking, and mobile wallets due to their highly significant impact on profitability. This includes expanding the infrastructure, enhancing security, and providing user-friendly interfaces to facilitate wider adoption and usage.
Determinants of Effective Inventory Management Practices in the Manufacuring Firms in Ethiopia: The Case of DH Geda Business Group
(A.A.U, 2022-06-12) Dema Kemalo; Abebe Yitayew (PhD)
This study focuses on the assessment of inventory management practice of DHGEDA Business Group. The study adopted descriptive and explanatory research design in which mixed research method. Stratified and purposive sampling techniques were employed. Data collection instrument questionnaire and interview was applied. The target population was 104 DH Geda Staff from different departments, from these 83 respondents were used as sample. Out of the 83 questionnaires distributed, 81 questionnaires were collected and examined that representing 97.6% response which considers being excellent. The SPSS version 26 and excel 2010 was used to process the primary data which is collected through questionnaire. Statistics applied included Pearson correlation coefficient & linear regression analysis. The result of the study shows that the main challenges faced in inventory management practice of the company such as unavailability of input, quality problem, lack of coordination between department and Lack of good warehouse management. Also company does not apply scientific inventory management techniques. Effective inventory management practice help to increase competitiveness through quality of product, speed of delivery and equivalent price of product. The study found that funding, staff and information technology have a positive correlation and significant influence on the effectiveness of inventory management. Procurement procedures have a positive correlation and insignificant influence on the effectiveness of inventory management. Lastly, the study recommends that company should ensure effectiveness of inventory management practice through allocate sufficient fund, improve procurement procedure, develop technology with qualified staff and apply scientific inventory management techniques. This help to undertake significant cost minimization, product quality, speed of delivery and increase profitability to create sustainable competitiveness.
Determinants of External Audit Effectiveness in the Hospitality Industry in Ethiopia: the Case of Five-Stars Hotels in Addis Ababa
(AAU, 2025-03-05) Seble Bejiga; Habtamu Berhanu (PhD)
This study examines the determinants of external audit effectiveness in Ethiopia’s hospitality industry, focusing on five-star hotels in Addis Ababa. It explores the impact of auditor qualifications, independence, regulatory frameworks, management cooperation, and industry-specific challenges on audit effectiveness. A quantitative approach was employed, combining quantitative data collected through structured questionnaires from external auditors and hotel management. Descriptive and inferential statistical methods were applied using STATA software to analyze the data. Findings indicate that auditor competence, independence, and a strong regulatory framework significantly enhance audit effectiveness, while industry challenges and limited management cooperation hinder the process. The study underscores the need for strengthened regulations and improved collaboration between auditors and hotel management to enhance financial transparency and accountability in the sector
The Role of Micro-Loans in the Growth of Small & Medium Enterprises (SME) in Addis Ababa City
(A.A.U., 2024-02-04) Yisahak Yitagesu Abebe; Temesgen Worku ( PhD)
This research thesis is constructed to study the role of micro-loans provided by microfinance institutions & saving and credit associations in the growth of small & medium enterprises. To see the impact of micro-loans, the study measures the growth in income, capital, and asset of the enterprises through different mechanisms. This study follows a quantitative research format to analyze the data collected and an analytical research approach is used to present the results. The research was conducted by administering 181 forms of questionnaires and include secondary data found from the enterprises. The sampling technique applied in the study is convenience sampling. The finding of this study reveals that after the introduction of micro-loans by microfinance institutions many small and medium enterprises and individual entrepreneurs were able to satisfy their need for additional working capital. In addition to that, micro-loans have played a major role in the development and growth of these enterprises. As the finding of this study reveals the income, capital, and profit of the enterprises that are involved in accessing micro-loans have improved significantly. Moreover, the attitude of investing only own money by many individuals has changed and it is witnessed by the results observed in the capital structure change. Due to that the debt-to-equity ratio has been reversed through the five years under study.
The Effect of Credit Risk on Financial Performance in Commercial Bank of Ethiopia (Camel Approach)
(A.A.U., 2024-06-04) Buzuayehu Wubu; Habtamu Berhanu( PhD)
This study investigates the effect of credit risk on the profitability, measured by the Return on Assets, of the Commercial Bank of Ethiopia. The research utilized secondary data sourced from the audited financial reports of the CBE, the National Bank, and the CBE’s portal page, covering the period from 2009 to 2023. Analysis was conducted using STATA 15 software, employing descriptive statistics and time series data to conduct linear regression. The findings reveal a substantial and inverse correlation between ROA and Non-Performing Loans , Capital Adequacy Ratio, Bank Productivity and Net Interest Margin. Conversely, ROA shows a positive correlation with Loan Growth Rate. The recommendations from this study suggest that the Commercial Bank of Ethiopia should enhance its credit risk management capabilities. Additionally, it is advised that the bank should manage staff-related expenses more effectively and ensure that economical profitability is considered alongside financial profitability for each branch. To maximize profitability (ROA), the CBE should prioritize credit risk management strategies to minimize non-performing loans.
Assessing the Effect of Taxpayer Education Programs in Enhancing Tax Compliance in The Case of Addis Ababa Taxpayers
(A.A.U, 2024-06-01) Dagmawe Kassahun; Samuel Kifel(PhD)
Tax compliance is crucial for generating government revenue, which in turn supports public services and infrastructure. However, in Ethiopia, a significant challenge remains in non-compliance, often due to a lack of understanding or awareness of tax obligations. This is because the tax education program provides limited comprehensive knowledge and inadequate outreach to the taxpayers. Therefore, this study aims to assess the effect of tax education programs on enhancing tax compliance, focusing on general, legal, and procedural tax knowledge provided to taxpayers, as well as the methods used to reach information to the taxpayers in the Addis Ababa Medium regional taxpayers. The research design adopted was an explanatory research design based on closed-ended and unstructured interviews conducted with each branch of the tax education department managers to gain an in-depth understanding and a sample of 330 out of 390 participating taxpayers in the education program was used in this study, employing purposive and clustering sampling techniques to select from each medium region tax branch found in Addis Ababa, The findings indicate a statistically positive effect of general tax knowledge, legal tax knowledge, procedural tax knowledge, and outreach methods prepared by the tax branches in enhancing taxpayer compliance level. Based on the analysis of questionnaires and interviews with the taxpayers, the research recommends a widespread presence on social media. The tax authority should increase engagement on platforms like Telegram and Facebook, providing regular updated information and interactive sessions. Additionally, the tax authority of the medium taxpayers should partner with universities and colleges to incorporate tax education, and the education program supervisory framework should be implemented to monitor and evaluate the effectiveness of these programs regularly.
Determinants of tax audit performance in the case study of Addis Ababa revenue in Medium taxpayer branch office
(A.AU., 2024-06-03) Demisse Degu; Alem Hagos (PhD)
The objective of this project work was to investigating determinates of tax audit performance: in the case of Addis Ababa revenue in medium taxpayer branch office. For the accomplishment of this project, the study were employed descriptive and explanatory research design used. The ultimate objective of this project identifying potential variables that determine tax audit performance. By offering insights into the research questions, the method of data collection were quantitative and qualitative methods. This researcher introducing explanatory research designs, to explain the relationship between dependent variable (tax audit performance) and the independent variables. Both primary and secondary data source would be utilized by the researcher. Structured questionnaires were used to gather primary data. The researcher also made used secondary data from the branch's annual audit performance and audit report. Purposive sampling technique was used in this project. The questionnaires were in the form of a Likert scale. The questionnaires were distributed to 91 tax auditors to obtain the necessary information. IBM SPSS Statistics 2013 software was used to analyze the data, which was presented in tables and diagrams; Based on the findings, The findings revealed that all independent variables had positive and significant coefficients, This indicates that as the value of an independent variable increased, the mean of the dependent variable (audit performance) also rise, management support had the strongest positive and significant impact on audit performance, the Ministry of revenue of Ethiopia suggests that the tax audit performance be positively impacted by top management support, auditor skills, auditor satisfaction, and auditor independence, all of which were statistically significant. Thus, the Ministry of revenue of Ethiopia recommended to provide greater support for tax audits by deployed qualified audit staff in the branch.
Practices and Challenges of Electronic Data Process Auditing in Selected Commercial Banks of Ethiopia
(A.A.U, 2022-06-25) Bekele Yitbarek; Degefe Duressa (PhD)
The main objective of the study was to investigate the practices and challenges of EDP in internal auditing function in case of selected commercial banks, head offices. Descriptive research design was employed to conduct the research with method approach. Participant of the study were 87 and 15 process owners were selected for interview. Questionnaires and structured interview were the instruments used for data collection. Frequency distribution, percentage, mean and standard deviation were used to present, analyze and interpret data in line with each research questions. Based on the study, existence of budget allocation problem in EDP application in internal audit functions, and lack of management support in promoting and encouraging EDP, lack of technical and managerial skills in implementation and development of E-banking technology, lack of social awareness regarding E-auditing services provided, high cost of implementation of E-banking, poorly developed telecommunication infrastructure, lack of law mandating the bank to adopt E-banking technology and lack of suitable legal and regulatory framework for EDP Auditing were considered as factor that has a negative influence on the adoption and growth of E-auditing technology in commercial banks. As per the findings giving more emphases towards the EDP system in audit process, solving infrastructure that challenges EDP in internal auditing, subsidizing the high cost for ICT equipment that challenges banks in introducing E-banking, arranging appropriate program for training, creating deep awareness to employees concerning the role of EDP in internal auditing they offer and the benefits associated with using Electronic services through advertising their services on the internet, mass media as well as through organizing public exhibition and talk shows were recommended
Practices and Challenges of Electronic Data Process Auditing in Selected Commercial Banks of Ethiopia
(A.A.U, 2022-06-24) Estifanos Bekele; Degefe Duressa (PhD)
The main objective of the study was to investigate the practices and challenges of EDP in internal auditing function in case of selected commercial banks, head offices. Descriptive research design was employed to conduct the research with method approach. Participant of the study were 87 and 15 process owners were selected for interview. Questionnaires and structured interview were the instruments used for data collection. Frequency distribution, percentage, mean and standard deviation were used to present, analyze and interpret data in line with each research questions. Based on the study, existence of budget allocation problem in EDP application in internal audit functions, and lack of management support in promoting and encouraging EDP, lack of technical and managerial skills in implementation and development of E-banking technology, lack of social awareness regarding E-auditing services provided, high cost of implementation of E-banking, poorly developed telecommunication infrastructure, lack of law mandating the bank to adopt E-banking technology and lack of suitable legal and regulatory framework for EDP Auditing were considered as factor that has a negative influence on the adoption and growth of E-auditing technology in commercial banks. As per the findings giving more emphases towards the EDP system in audit process, solving infrastructure that challenges EDP in internal auditing, subsidizing the high cost for ICT equipment that challenges banks in introducing E-banking, arranging appropriate program for training, creating deep awareness to employees concerning the role of EDP in internal auditing they offer and the benefits associated with using Electronic services through advertising their services on the internet, mass media as well as through organizing public exhibition and talk shows were recommended
Factors Affecting the Adoption of Electronic Banking and Agent Banking in the Ethiopia in Case of Selected Banks.
(A.A.U, 2024-06-20) Biks Misgan; Laxmikantham Padakanti (PhD)
The purpose of this descriptive study is to identify the variables and factors affecting the adoption of electronic banking and agent banking in Ethiopia's banking sector. A survey design was employed through the use of questionnaires sent out to the respondents. According to the report, the banking industry's biggest obstacles to implementing electronic banking and agent banking were a lack of skilled IT workers, insufficient national ICT infrastructure, a lack of government support, security risks, a lack of legal and regulatory frameworks, and a lack of competition from foreign and domestic banks. The study population comprised the selected five banks, namely Commercial Bank of Ethiopia, Awash International Bank, Dashen Bank, Bank of Abyssinia, and Addis International Bank. The collected data was analysed using descriptive statistics using SPSS version 26. The study also found that prospects for adopting electronic banking and agent banking systems were determined by perceived usefulness and cases of use. In order to support the banking industry, the study recommends that Ethiopian tel-com invest in ICT infrastructure developments. It also shows that the government establishes comprehensive legal and regulatory frameworks on the use of technological innovation and the use of third-party retail agents in the banking sector, closely monitors the banking industry, and strictly enforces adherence to e-banking and agent banking guidelines. Meanwhile, the banks should continuously ensure that agents are carefully evaluated.
The Effects of Foreign Currency Shortage on Performance of Ethiopian Brewery Companie (Bgi Ethiopia Plc)
(A.A.U, 2022-11-04) Keneni Asrat; Alem Hagos (PhD)
Shortage of foreign currency is one of the characteristics of developing countries. Exchange rate changes affect the production level of industries through trade channel effects and variation of the prices of inputs and outputs. One of the major areas which is affected by shortage of foreign currency is the performance v of an organization. The aim was to explore the effect of foreign currency shortage on performance of Ethiopian Brewery companies. Mixed research design was implemented to explore the effect of foreign currency shortage on performance of Ethiopian Brewery companies; data were collected from focal persons through Likert scale and open–ended questionnaires. Qualitative data was also collected and analyzed with TAC Data collected from focal persons were analyzed qualitatively whereas data collected from closed ended survey questionnaires analyzed quantitatively by descriptive analysis to examine the effects of foreign currency shortage on the selected company’s performance. Study participants (survey, interviewees and Key informants) were selected purposefully and included in this research. Thematic Content Analysis (TCA) technique was used to analyze the data. A total of 22 individuals participated in the study. The triangulated findings (from Survey, document review, interview) showed that the company suffers from high (84.6%) cost of production that can confirm poor company performance. The study found that among the dominant transaction, the company spent more for raw material cost (38.8%) and labor cost (15.4%) which affects seriously the performance of the company. A number of factors are found out but 2 main categories of factors (Internal & External) identified that affect company performances in such a way that shortage of foreign currency affected the performance by declining the company’s productivity, machinery efficiency and the profit margin. Overall, the performance of the company found to be relatively low. The study found out higher level of severity company performance was found to be poor as it spent high cost of production indicating foreign currency shortage has effect on the parameters. The firm supposed to revise its plan and devise effective mechanisms to be more competitive as well as resist the dynamic changes as result of shortage of FC in the country. Also, the concerned bodies supposed to give an opportunity of tax reduction and holidays on the imported items and services, on the brewery companies to reduce the effect of foreign currency shortage on industry’s performance.
Postgraduate Program in Accounting and Finance The Impact of Working Capital Management on Profitability of Selected Real Estate Companies in Addis Ababa.
(A.A.U, 2024-04-02) Mhiret Kbirom; Alem Hagos(PhD)
The objective of this study was to investigate the impact of working capital management on profitability of selected real estate companies in Addis Ababa. In light of the above objective the study employed quantitative research approach to test research hypothesis. Sample of six (6) companies were purposively selected through purposive sampling and the sample firms’ financial statement was collected for the period of five years from 2014 to 2023. In this study the firm’s profitability was measured by return on asset and working capital measures of cash conversion cycle, average collection period, inventory conversion period and account payable payment period were used as independent variables to measure working capital management efficiency additionally some control variables such as current ratio, debt ratio, firm size, current asset to total asset ratio and current liabilities to total asset ratio used in this study. The values of those variables were calculated from the combination of different balance sheet and income statement items and data was analyzed on quantitative basis using descriptive correlation and regression analysis (pooled ordinary least square) method. Results found shows that working capital management has statistically significant negative impact on the firms’ profitability. It means managers can enhance their profitability by handling correctly the cash conversion cycle and keeping average collection period, inventory conversion period and accounts payable payment period to a possible optimum level. Therefore, managers of those companies could increase their profitability by effectively managing their working capital.
Determinants of Approval and Repayment Performance of Housing Finance in Addis Ababa; in Case of Zemen Bank S.C
(A.A.U, 2024-03-03) Mihretu Bayeh; Takele Fufa (PhD)
This study was conducted on the topic of determinants of approval and repayment performance of housing finance in case of Zemen Bank S.C. with the objective of assessing the determinants of Approval and Repayment Performance of Housing Finance in Addis Ababa city. To conduct this study, the researcher used descriptive and explanatory research design and primary and secondary data were used. Primary data were collected using questionnaires and the secondary data were collected through verifying documents. The total population of the study was 655 which include 637 borrowers and 18 employees and the total sample size was 78. Stratified and judgmental sampling techniques were employed to select a sample from borrowers and employees of the bank respectively. In this study the data obtained from borrowers and the bank was analyzed using descriptive statistics analysis and Binary Logit Model was used to measure the variables those are determining loan repayment performance of housing finance. In the logistic regression model, a total of thirteen explanatory variables representing three dimensional namely demographic factors, socio-economic factors and institutional factors were considered to analyze loan repayment performance. Based on the findings of this study, the researcher concludes that employment status, income from other sources, spouse income sources, interest rate, change of inflation and loan utilization have found to be significant effect on loan repayment performance of housing finance. On the other hand, average house hold income, saving culture, loan size, loan repayment schedule, timeliness of loan release, loan supervision and loan diversion have found to be insignificant effect on loan repayment performance of housing finance. Finally, possible recommendations were suggested that, the bank might consider the significant variables such as employment status, income from other sources, spouse income sources, interest rate, change of inflation and loan utilization as the basis for loan approval and to minimize loan default rate.

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