The findings clearly show that both bank-specific as well as macroeconomic factors explain the variation in commercial bank profitability over the study period. The explanatory variables are growth in bank assets, growth in bank deposits, capital adequacy, operational efficiency (inefficiency), and liquidity ratio as well as the macroeconomic variables of growth in GDP and inflation. Using the cost efficiency model, bank profitability was estimated using panel random effects method in static framework. The analysis used an unbalanced panel of 216 commercial banks drawn from 42 countries in SSA for the period 1999 to 2006. The central theme of this study was to investigate the determinants of commercial bank profitability in Sub-Saharan Africa. Finally, the estimation results indicated that individual effects on the profitability are present this is concluded due to the fact that some of the differential slope coefficients are statistically significant Results also showed that the estimated effect of size did not support the significant scale economies for Jordanian banks. High Jordanian bank profitability tends to be associated with well-capitalized banks, high lending activities, low credit risk, and the efficiency of cost management. Results showed that the Jordanian bank’s characteristics explain a significant part of the variation in bank profitability. Two measures of bank’s profitability have been utilized: the rate of return on assets (ROA) and the rate of return on equity (ROE). For this purpose 100 observation of 10 banks over the period 2001-2010 were comprised. This influences their decision making and financial performance positively.ĪBSTRACT In this study, a balanced panel data set of Jordanian banks was used for the purpose of investigating the nature of the relationship between the profitability of banks and the characteristics of internal and external factors. Heated discussions now surround the basis of financial performance measurement via historical cost accounting. Thus, the study recommends that retail stores always consider inflation changes and apply inflation accounting techniques to make adjustments to produce more accurate results in their financial statements.
The findings of this study highlighted positive relationships between the variables that were used. The empirical study reveals how inflation accounting significantly impacts organizational decisions and financial performance of the retail business with such coefficients (F (1, 159) = 49.269, p <. Thus, the Exploratory Factor Analysis and linear regressions were employed in this study. A total of 161 completed questionnaires were received from respondents in the selected 20 listed stores in Kwa-Zulu Natal. The study used a quantitative research method. Thus, the effects of inflation accounting on organizational decisions and financial performance of Kwa-Zulu Natal retail stores were evaluated in this study.
The inflation accounting technique allows a business to show or have a sensible picture of their gains due to present cost coordinates with present revenues.
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