ASSESSING THE IMPACT OF LIQUIDITY AND PROFITABILITY RATIOS ON GROWTH OF PROFITS IN PHARMACEUTICAL FIRMS IN MGERIA
Keywords:Liquidity. Profitability, Return on Equity, Return on Assets, Working capital, Return on Capital Employed, Growth of Profit
This paper assesses the impact of liquidity and profitability ratios on growth of profits in Pharmaceutical firms in Nigeria. Eight ratios: acid test, current ratio, networking Capital. Return on assets, returns on capital employed, returns on equity, gross profit ratio and net profit ratio were regressed against the dependent variable growth of profit. Haussmann test was conducted to choose between Fixed Effect and Random Effects model. Results justified the use of Fixed Effect model. Test results indicate significant contributions of all the variables to profit growth of pharmaceutical companies in Nigeria implying that continued improvement in the variables can lead to increases in growth of profit by the Pharmaceutical firms.