European Journal of Accounting, Finance and Investment

Liquidity, Firm Size, Financial Leverage On Firm Value Moderated By The Profitability Of Maritime Firms In Nigeria

IFEHGA, David Ogonoye

Department of Marine Economics and Finance, Nigeria Maritime University, Okerenkoko, Delta State, Nigeria.

OKENE, Anthony Jovwo

Department of Marine Economics and Finance, Nigeria Maritime University, Okerenkoko, Delta State, Nigeria.

Keywords: Marine, Cash flow, Investment, Hausman, Companies

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Abstract

This study examines the moderating effect of profitability on the effects of liquidity, firm size, and financial leverage on firm value in Nigeria from 2013 to 2021. These bias-free secondary series were obtained from the annual reports of fifteen maritime companies. At a 95% level of confidence, descriptive, Hausman, and Random effect POLS techniques were employed. The Hausman test demonstrates that the Random effect model is superior to the fixed effect model. The Random effect POLS demonstrates that profit after tax and gearing ratio significantly increase firm value; current asset ratio is negative and insignificant to firm value; and firm size increases firm value but not significantly. The study concludes that liquidity ratio, financial leverage, and profitability are crucial factors for determining the value of Nigerian maritime firms. To maximise shareholder value, the study advises maritime companies to place greater emphasis on increasing their profitability while decreasing their liquidity. In order to increase their capital base and maximise their value, maritime companies should consider selling stock to the general public.