Financial Performance of Small and Medium Construction Firms (SMCFs) in Abuja, Nigeria

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1 Financial Performance of Small and Medium Construction Firms (SMCFs) in Abuja, Nigeria Janet Mayowa Nwaogu 1, Oaikhena Ehizemokhale Onokebhagbe 2, Folorunso Tunde Akinola 1, Akinyemi Tobi Akinlolu 1 ¹ Department of Building, Federal University of Technology, Akure, Nigeria. ² Department of Quantity Surveying, Federal University of Technology, Akure, Nigeria. Abstract The study investigated the performance of Small and Medium Construction Firms (SMCFs) in Nigeria using financial measures. Secondary data obtained from seven SMCFs who engaged in estate development were employed for this study. A total of 7 financial statements were collected from archive of the firms. Data collected from the financial statements were current ratios, profit margin, return on assets and return on equity. The data were analysed using frequency, percentages, liquidity ratio, profitability ratio and Altman s Z-score. Financial analysis on the firms showed that a large percentage (71%) were within the safe zones of the Altman Z-score while 29% were within the unhealthy zone of the Altman Z-score and would need to re-structure so that they do not go bankrupt within the following 2 years. The study concluded that small and medium construction firms in Abuja are performing well financially with most of the firms in a healthy state as determined by the Altman s Z-score. Keywords Clients satisfaction, employees satisfaction, performance, SMCFs, I. INTRODUCTION The construction industry is highly sensitive to economic revolutions and faced with high rate of business failure (Enshassi et al., 2006). The Nigerian Construction Industry is pivoted to economic development accounting for several million jobs (Afolabi et al., 2013). Onugu (2005) and Solomon (2010) noted that small medium firms generally face some challenges which include poor administrative and managerial skills, ownership structure, lack of effective policies or framework, low documentation of policies, little or no training and development of staff, financial constraints and poor infrastructure. Tseheliso (2012) buttressed this point by noting that owners of small medium construction firms own such firms without proper technical know-how or managerial skills; they are able to open such because they have start-up capital and only get people with knowledge to manage it for them. Company failure in construction industry has been seen as a pervasive problem. Construction companies have a higher rate of failure than other types of companies (Tseheliso, 2012). According to Onyeiwu (2013), the rate of business failure in Nigeria and resultant financial loss has reached unbearable level resulting to unpleasing effects. Warner (1977) in Ani and Ugwunta (2012) noted that to ensure an economic growth which is sustainable, it is of extreme importance to control the failure rate of firms. Also Ani and Ugwunta (2012) opined that the abnormal behaviours of firms are leading indicators of unhealthy performances. In the face of this failure, the construction industry which is faced with entry by all and sundry is not exempted. It is therefore imperative for firm owners and investors to have a way of evaluating the health of their organisation. This is to enable them develop early warning systems and signals such that concerned firms in distress position will be able to take actions to prevent the firm s failure. In line with this thought, the study evaluated the health of SMCFs using a technique known as Multiple Discriminant Analysis (MDA) which entails using the Altman s Z-score to discriminate between healthy and unhealthy organisations. This will help construction firms especially the small and medium firms with information on appropriate model to use for timely gauging their firm s health. The study aimed at evaluating the performance of small and medium construction firms (SMCFs) engaged in property development in Abuja with a view to providing information that will enhance effectiveness of the firm, the specific objective was to determine the financial performance of the firms in the study area. II. PERFORMANCE OF SMCFs Financial performance relates to a company s financial health, such as revenues, expenses and profits. It tells about a firm s overall health over a given period of time (Bhunia et al., 2011). According to the Business dictionary (2014), financial performance refers to measuring the results of a firm s policies and operations in monetary terms. These results are reflected in the firms financial statements by return on assets, return on investment, along with other ratios. The financial performance of an organisation can be determined by analyzing the firms financial statement in order to identify the firms strengths and weakness and overall health of such firm. According to Financial Statement (2013), in analyzing financial statements for the Page 1

2 purpose of granting credit and assessing status of a firm, ratios can be broadly classified into three categories namely: liquidity ratios, efficiency ratios and profitability ratios. A. Liquidity Ratios Liquidity Ratios are ratios gotten off the balance sheet and thus measure the liquidity of the company as at the day that the balance sheet was prepared. These ratios are important in measuring the ability of a company to meet both its short term and long term obligations (Financial Statement, 2013). The first liquidity ratio is the current ratio and it is obtained by dividing the total current assets of a company by its total current liabilities. The ratio is regarded as a test of liquidity for a company and expresses the working capital relationship of current assets available to meet the company's current obligations. The agreed benchmark for current ratio is 2:1 or 2, that is, total current asset of the company must be two times more than total current liabilities (Financial Statement, 2013). The formular is: Current Ratio = Current Assets / Current Liabilities 1 The second liquidity ratio is the quick ratio which is obtained by dividing the total quick assets of an organisation by its total current liabilities. The ratio is regarded as an acid test of the liquidity of a company, expresses the true working capital relationship of its cash, accounts receivables, prepayments and notes receivables available to meet the company's current obligations. What this ratio does is that when a company is carrying heavy inventory as part of its current assets, which might be obsolete or slow moving, eliminating inventory from current assets and then doing the liquidity test is measured by this ratio (Financial Statement, 2013). Basically, quick asset are current assets that can be converted to cash within 90 days or in a short-term and thus quick ratio measures the ability of a firm to offset or pay its current liabilities when they are due. The formular is: Quick / Acid Ratio = Total Quick Assets / Total Current Liability 2 where: Total Quick Assets = Current Asset - Inventory The third liquidity ratio is debt to equity ratio which is obtained by dividing the total liability or debt of a company by its owner s equity (net worth). This ratio measures how a company is leveraging its debt against the capital employed by its owners. What happens is that in the case that the liabilities exceed the net worth, then the creditors have more stake than the shareowners (Financial Statement, 2013). B. Profitability Ratios Profitability ratios indicates how successful an organisation is in terms of generating returns or profits on the investment it has made into the business. If a business is liquid and efficient it should also be profitable (Financial Statement, 2013). The first profitability ratio is the return on sales or profit margin. The profit margin on sales of a company determines its ability to withstand competition in adverse conditions like rising costs, falling prices or declining sales in the future. The ratio measures the percentage of profits earned per dollar of sales and thus is a measure of efficiency of the company (Financial Statement, 2013). The formula is: Return on Sales or Profit Margin = (Net Profit / Net Sales) x The second profitability ratio is return on assets. The Return on Assets (ROA) of a company determines its ability to utilize the assets employed in the company efficiently and effectively to earn a good return. The ratio measures the percentage of profits earned per naira of asset and thus is a measure of efficiency of the company in generating profits on its assets (Financial Statement, 2013). Ten percent (10%) return on asset is mostly advisable (Construction Industry Ratios, 2000; Financial Statement, 2013). The formular is: Return on Assets = (Net Profit / Total Assets) x The third profitability ratio is the return on equity or net worth. The Return on Equity (ROE) of a company measures the ability of the management of the company to generate adequate returns for the capital invested by the owners of a company (Financial Statement, 2013). Return on equity (ROE) helps investors distinguish between companies that are profit creators and those that are profit burners. A company's ROE ratio is calculated by dividing the company's net income by its shareholder equity, or book value. Generally a ROE of 15% would be desirable to provide dividends to owners and have funds for future growth of the company (Ben, 2013). The formular is: Return on Equity = (Net Profit after Tax / Net worth) x where: Net worth = Total Asset Total Liability Page 2

3 C. Operating margin This is a ratio used to measure a firms pricing strategy and operating ability (Financial Statement, 2013). It is a measurement of what proportion of a firm s revenue is left over after paying for variable cost of production such as wages, raw materials. The formular is: Operating Margin = Operating Income / Net Sales (Turnover). 6 D. Health of an organisation According to Onyeiwu (2013), the overall health of an organisation can be determined by using the Altman Z-score, the Z-score is a linear analysis in that five measures are objectively weighted and summed up to arrive at an overall score which becomes the basis for classification of firms into distress and non distress group. The Altman Z-score is a combination of five weighted business ratios that is used to estimate the likelihood of financial distress (Stockopedia, 2011). The specific variables in the Z-score are T1, T2, T3, T4 and T5 representing working capital / total assets, retained earnings/total assets, earnings before interest and tax/total asset, market value of equity/total liabilities and sales/total assets respectively (Altman, 2000; Onyeiwu, 2008). The use of the Z-score includes zones of interpretation: Z score above Safe Zones. The company is considered Safe based on the financial figures only < Z < Grey Zones. There is a good chance of the company going bankrupt within the next 2 years of operations. Z below Distress Zones. The score indicates a high probability of distress within this time period. If the Altman Z-score is close to or below 2.9, it is wise to do some serious due diligence (Stockopedia, 2011). According to Altman (2000), the Z-score has subsequently been re-estimated based on other datasets for private manufacturing companies, as well as non-manufacturing / service companies. For public companies, the Z-score is calculated as follows: 1.2*T *T *T *T *T5 7 Where: T1 = working capital / total assets T2 = retained earnings / total assets T3 = earnings before interest and tax / total assets T4 = market value (or book value) of equity / total assets T5 = sales / total assets According to Altman (2000) and Stockopedia (2011), the usefulness of the original Z score measure was limited by two of the ratios. The first ratio is T4 (the Market Value of Equity divided by Total Liabilities). The authors opined that if a firm is not publicly traded, its equity has no market value, to deal with such instance; there is a revised Z score for private companies: Z1 = 0.717*T *T *T *T *T5 (in this case, T4 = Book Value of Equity / Total Liabilities).. 8 The other ratio is T5 - Asset Turnover. This ratio varies significantly by industry but, because of the original sample, the Z-score expects a value that is common to manufacturing. To deal with this, there is a more general revised Z-score for non-manufacturing businesses: Z2 = 6.56*T *T *T *T4.. 9 i) T1 = Working capital (WC) / Total asset (TA): this measures liquid asset as firm in trouble will usually experience shrinking liquidity (Stockopedia, 2011). It is a measure of the net liquid assets of the firm relative to the total capitalization. Working capital is defined as the difference between current assets and current liabilities (Onyeiwu, 2008). ii) T2 = Retained earnings (RE) / Total assets (TA): this indicates the cumulative profitability of the firm, as shrinking profitability is a warning sign (Stockopedia, 2011). This ratio measures the cumulative profitability over time, the age of a firm is considered in this ratio (Onyeiwu, 2008). iii) T3 = Earnings before interest and tax / Total assets: this ratio shows how productive a company is in generating earnings, relative to its size (Stockopedia, 2011). T3 is calculated by dividing the total assets of a firm into its earnings before interest and tax reduction. In essence, it is a measure of the true productivity of the firm s assets, abstracting from any tax or leverage factors; since a firm s ultimate existence is based on its earning power of its assets, this ratio appears to be particularly appropriate for studies dealing with corporate failure (Onyeiwu, 2008). Page 3

4 iv) T4 = Market value of equity / Total asset: this offers a quick test of how far the company's assets can decline before the firm becomes technically insolvent (i.e. its liabilities exceed its assets) (Stockopedia, 2011). Equity is measured by the combined market value of all shares of stock; preferred and common, while liabilities include both current and long. The measure shows how much the firms assets can decline in value (measured by market value of equity plus debt) before the liabilities exceed the assets and the firm becomes insolvent (Onyeiwu, 2008). v) T5 = Sales / Total sales (S/TA): Asset turnover is a measure of how effectively the firm uses its assets to generate sales, that is, it measures the firm s asset utilization (Stockopedia, 2011). It is one measure of management s capacity in dealing with competitive conditions (Onyeiwu, 2008). This ratio is quite important because it is the least significant ratio on an individual basis but has a unique relationship with other variables in the model. In fact it ranks second in its contribution to overall discriminating ability of the Z-score model (Onyeiwu, 2008). III. METHODS OF DATA COLLECTION AND ANALYSIS The study aimed at determining the financial performance of SMCFs through the use of financial ratios and the Multi Discriminant Analysis (MDA) model using the Altman Z-score. The data vital for this analysis were obtained from the financial statements of 7 SMCFs engaged in estate development within Abuja. The firms were selected randomly from the archive of Real Estate Developers Association of Nigeria (REDAN) in Abuja. The financial performance of SMCFs was evaluated through financial ratio analysis of the firms; this included the ability of the firms to meet up their set growth obligation with respect to debts, net worth of assets- current and fixed, level of return on capital; it would also guide SMCFs into forecasting their future financial conditions and the general behaviour of the business. In order to achieve the set objective, the ratios used were liquidity and profitability ratios as well as the Altman Z-score. (a) In the liquidity ratio, factors considered include short term liquidity obtained by evaluating the firms Current Ratio (CR). The formular of CR is: Current Ratio = Current Assets / Current Liabilities.. 10 (b) In the profitability ratio, the firms Return on Sales or Profit Margin on Sale (PMS), Return on Assets (ROA), Return on Equity (ROE) and the Operating Margin (OM) were considered. The formulars used to calculate the ratios are given thus: Return on Sales or Profit Margin = (Net Profit / Net Sales) x 100 Return on Assets = (Net Profit / Total Assets) x Return on Equity = (Net Profit after Tax / Net worth) x where: Net worth = Total Asset Total Liability Operating Margin = Operating Income / Net Sales (Turnover) (c) The Z-score formular used to evaluate the health of the SMCFs is the revised Z score for private companies: Z = Z Z Z Z Z5 (in this case, Z4 = Book Value of Equity / Total Liabilities) IV. RESULTS AND DISCUSSION Ratios considered in determining the profitability ratio were Profit Margin on Sale (PMS), Return on Assets (ROA) and Return on Equity (ROE). Table I shows the financial ratios for SMCFs. The financial ratios were analyzed from financial statement collected from seven SMCFs. Thereafter, the frequency and percentage of distribution of the result is outlined in Table II. The health status of only seven (7) of the firms was determined using the Z-score as given by Altman (2000), the Z-score is a combination of five weighted business ratios that is used to estimate the likelihood of financial distress. Table III detailed the Z-score of SMCFs, the firms were further categorized as healthy and unhealthy firms based on the mean of their Z-score. From Table I, there are two (2) firms; JB Homes, Anny Homes with decreasing Current Ratio (CR) while three (3) firms; Filter Consult, Kelly Shelter, Rock Ltd had an increasing current ratio whereas two (2) firms; Fem Properties and Archlon Nigeria had a fluctuating CR over the period of years. In order to explain the financial performance of the firms in Table I, Fem Properties is used here as a prototype explanation. It Page 4

5 can be seen from Table I that in terms of short-term liquidity, Fem Properties made a current ratio (CR) of 4.63:1 in 2011 and 5.68:1 in 2012 as against the allowable minimum of 2:1. This means that the firm was liquid and can lend from banks having ability to finance new contracts and meet current obligations. However in 2013 with CR = 1.12:1, the firm was not liquid and therefore cannot lend from banks. It appears that Fem Properties CR dropped below benchmark because they engaged basically in property development and might have suffered from clients who have delayed to pay off on their properties or have challenges getting offtakers for their properties. The firm s profit margin (PM) decreased yearly between 2011 and 2013, from 7.85% to 3.76% to 0.66% of the yearly turnover; operating income ratio (OIR) also decreased yearly from 11.59% to 8.26% to 1.04%. It can be deduced that the firm effectively employed the company s assets appropriately in 2011 with Return on Assets (ROA) being 21.37%, while in 2012 and 2013 asset employment is concluded to be inappropriate where ROA reduced from 8.14% to 2.28% and below ROA benchmark of 10%. The firms Return on Equity (ROE) fluctuated between the 3 years from 25.86% to 9.36% to 18.5% during the period under review, ROEs in 2011 and 2013 were good and above satisfactory benchmark of 15%, while in 2012, ROE was unsatisfactory and below benchmark. This implied that in 2011 and 2013, Fem Properties gave its shareholders (directors who are shareholders) more for their money and has adequately managed capital employed in the business while in 2012 the situation was unsatisfactory. Table II shows the frequency and percentage distribution of liquidity and profitability ratio of the firms over the period of year. Table II interprete the findings in Table I especially the current ratio (CR), return on assets (ROA) and return on equity (ROE). From Table II, it can be concluded that 42.9% of the firms listed had satisfactory current ratio well within the benchmark of 2:1 and above within the period of years. This means that the firms have enough assets to meet short term creditors and liabilities. However, 14.3% of these firms had CR less than benchmark 2:1; 42.9% of these firms either have CR within or above benchmark in one or another year within the period of years. The implication of the results is that only 42.9% SMCFs who had increasing CR through the period of three years can assess loans from mortgage banks easily. From Table I, 42.9% of the firms had a decreasing Profit Margin on Sale (PMS) over the period of years, 14.3% SMCFs had an increasing profit margin per year while 42.9% had experienced a fluctuating profit margin within the period of years. It appeared that owing to the nature of property development project where clients pay in instalments, PMS of SMCFs fluctuate. However they make profit per year. From Table II, 14.3% of the SMCFs had ROA within and above benchmark of 10% throughout period, it can be further explained that only 14.3% of the firms employed company s assets appropriately. It can be inferred also that 71.4% of the firms had ROA within benchmark 10% in one or two years through the period of years, this 71.4% of firms utilized their assets appropriately within one or two years but failed to do so appropriately in one or two other years. 14.3% of SMCFs had ROA below benchmark throughout the period of years. These categories of SMCFs have not in any year employed their assets appropriately. The implication of this result is that, it is safe for anyone to invest into SMCFs as they would properly use every resources invested into the business. From Table II, it can be inferred that 14.3% of the firms have ROE within or above benchmark 15% through the period of years, which meant that, the firms gave shareholders (directors) more for their money and has adequately managed capital employed in the business through the period of years. On the other hand, 71.4% of the firms have ROE within or below benchmark 15% in one or two years, which signifies that in one or two years within the period they did not manage capital employed appropriately. Lastly, 14.3% of the firms did not manage capital employed appropriately as they had ROE below benchmark of 15% all through the period. The implication of this study is that SMCFs are fit to give their shareholders more returns on every share owned. Page 5

6 TABLE I FINANCIAL RATIOS FOR SMCFs Year S/N Firms CR CR CR PMS PMS PMS ROA ROA ROA ROE ROE ROE OM OM OM 1 Fem Properties Archlon Nigeria Filter Consult Limited 4 Kelly Shelter Rock Limited Anny Homes JB Homes Page 6

7 TABLE II LIQUIDITY AND PROFITABILITY RATIO DISTRIBUTION IN SMCFs Variable Frequency Percentage Current Ratio (CR) SMCFs CR within benchmark 2:1(through period) CR below benchmark 2:1(one or two years) CR below benchmark (throughout period) Total Return on Assets (ROA) SMCFs with ROA within benchmark 10% (through period) ROA below benchmark through period of years ROA within benchmark in one or two years Total Return on Equity (ROE) SMCFs with ROE within benchmark 15% (through period) ROE within benchmark in one or two years ROE below benchmark through period Total THE HEALTH OF SMCFs Table III shows the Z scores of the firms whose financial statements were adequately prepared, information on the working capital, retaining earnings, earnings before interest and taxes, book value of equity, total liabilities and total assets of each firm can be found seen in Appendix A. It can be deduced from Table III that two (2) firms Archlon Nigeria and JB Homes are in the Z-score grey zones with 2.15 and 2.82 respectively. This means that in the following two years, the firms might go bankrupt, if they do not manage their assets and liabilities properly. Five (5) of the 7 firms whose health was analyzed are in the healthy state. These firms are: Fem Properties, Kelly Shelter, Filter Consult Ltd., Rock Ltd. and Anny Homes. This showed that most SMCFs studied are performing adequately financially and meets the findings of Ashan, et al. (2011) and Kaplan and Norton (1992). Page 7

8 TABLE II THE HEALTH STATUS OF SMCFs Year S/N Firms T1 T2 T3 T4 T5 Z T1 T2 T3 T4 T5 Z T1 T2 T3 T4 T5 Z Z Status mean 1 Fem Properties H 2 Archlon Nigeria FH 3 Filter Consult Limited H 4 Kelly Shelter H 5 Rock Limited H 6 Anny Homes H 7 JB Homes FH Where: H= Healthy; FH= Fair Healthy Page 8

9 V. CONCLUSION Through the collection of financial data (particularly 3-year financial statement) from SMCFs and analyzing these data, the study has examined the financial performance of small and medium construction firms in Abuja, Nigeria. The major conclusion made from the results obtained from the data analyses is that SMCFs are performing well financially with most of the firms in a healthy state. The study also concluded that though the firms were performing well financially, they had fair management of resources as shown by their current ratio (CR), return on equity (ROE), return on assets (ROA) and profit margin on sales. REFERENCES Afolabi, A. D., Graeme, D. L. & Runming, Y. (2013). Sustainable Construction in Nigeria: Understanding Firm Level Perspectives. Proceedings of the SB13 Sustainable Building Conference, pp Afshan, N., Sadia, E. S. & Khusro, P. (2011). Impact of Employee Satisfaction on Success of Organisation: Relation between Customer Experience and Employee Satisfaction. International Journal of Multidisciplinary Sciences and Engineering, Vol. 2, No. 5, pp Altman, E. I. (2000). Predicting the Financial Distress of Companies: Revisiting the Z-score and Zeta Model. Stern School of Business, New York University. Ani, W. U. & Ugwunta, D. O. (2012). Predicting Corporate Business Failure in the Nigeria Manufacturing Industry. European Journal of Business and Management, Vol. 4, No. 10, pp Ben, M. (2013). How Return on Equity Can Help You Profitable Stocks. Retrieved from Bhunia, A., Mukhuti, S. S. & Roy, S. G. (2011). Financial Performance Analysis- A Case Study. Current Research Journal of Social Sciences. Vol. 3, No. 3, pp Business Dictionary (2014). Financial Performance. Accessed December 5, Enhassi, A., Al-Hallaq, K., & Mohammed, S. (2006). Causes of Contractor s Business Failure in Developing Countries: The Case of Palestine. Journal of Construction in Developing Countries, Vol. 11, No. 2, pp Financial Statement Analysis- Profitability Ratios. (2013). Retrieved on August 2, 2013 from Financial Statement Analysis- Liquidity Ratios. (2013). Retrieved on August 2, 2013 from Kaplan, R. S. & Norton, D. P. (1992). The Balanced Scorecard- Measures that Drive Performance. Harvard Business Review, January-February, pp Onugu, B. A. (2005). Small and Medium Enterprises in Nigeria: Problems and Prospects. A PhD Thesis in Management submitted to St. Clements University. Onyeiwu, C. (2010). Financial Statement as Instrument for Predicting Corporate Health in Nigeria. Annual Conference Paper, Department of Finance, University of Lagos, Vol. 4, pp Solomon, G. (2010). Building Small and Medium Scale Enterprises: A Strategy for Economic Development in Nigeria. Jos Journal of Economics, Vol. 4, No. 1, pp Stockopedia, F. (2011). The Altman Z-score: Is it Possible to Predict Corporate Bankruptcy using a Formula?. Retrieved from Tsheliso, G. M. (2012). Assessment of the Causes of Failure among Small and Medium Sized Construction Companies in the Free State Province. An MSc Thesis in Construction Management submitted to University of Johannesburg. Page 9

10 Appendix A Appendix A1:JB Homes Extract from Financial Statement for Year Ended N N N Current Asset 8,972, ,165, ,257, Current Liabilities 5,518, ,202, ,345, Net Profit before Tax - 356, , , Net Profit after Tax - 489, , , Working capital (CURRENT ASSET- 3,454, ,963, ,912, CURRENT LIABITIES) Retained Earning - 20,374, , , Earnings before Interest and Tax - 356, , , Book value of equity (NET WORTH)) 10,193, ,155, ,594, Sales (Turnover) 30,715, ,286, ,043, Total Asset 15,679, ,324, ,906, Total Liabilities 5,551, ,234, ,345, T T T T T Z score Z mean Page 10

11 Appendix A2:Fem Properties Extract from Financial Statement for Year Ended N N N Current Asset 906, , ,752, Current Liabilities 195, , ,634, Net Profit before Tax 357, , , Net Profit after Tax 242, , , Working capital (CURRENT ASSET- CURRENT LIABITIES) 710, , ,117, Retained Earning 836, , ,189, Earning before Interest and Tax 357, , , Book value of equity (NET WORTH)) 936, ,102, ,353, Sales (turnover) 3,085, ,746, ,152, Total Asset 1,131, ,268, ,988, Total Liabilities 195, , ,117, T T T T T Z score Z mean Page 11

12 Appendix A3:Kelly Shelter Extract from Financial Statement for Year Ended N N N Current Asset 50,864, ,252, ,543, Current Liabilities 14,149, ,791, ,484, Net Profit before Tax 32,285, ,801, ,939, Net Profit after Tax 32,285, ,801, ,934, Working capital (CURRENT ASSET- CURRENT LIABITIES) 36,714, ,461, ,059, Retained Earning 4,468, ,469, ,404, Earning before Interest and Tax 32,285, ,801, ,934, Book value of equity (NET WORTH)) 53,914, ,028, ,355, Sales (turnover) 271,759, ,975, ,688, Total Asset 68,064, ,820, ,839, Total Liabilities 14,149, ,791, ,484, T T T T T Z score Z mean Page 12

13 Appendix A4:Anny Homes Extract from Financial Statement for Year Ended N N N Current Asset 79,463, ,184, ,326, Current Liabilities 23,532, ,157, ,838, Net Profit before Tax 76,165, ,769, ,645, Net Profit after Tax 65,617, ,897, ,097, Working capital (CURRENT ASSET- CURRENT LIABITIES) 55,930, ,027, ,488, Retained Earning 65,617, ,514, ,611, Earnings before Interest and Tax 76,165, ,769, ,645, Book value of equity (NET WORTH)) 116,173, ,281, ,355, Sales (turnover) 758,775, ,724, ,563, Total Asset 139,945, ,439, ,011, Total Liabilities 23,532, ,157, ,838, T T T T T Z score Z mean Page 13

14 Appendix A5:Rock Limited Extract from Financial Statement for Year Ended N N N Current Asset 33,561, ,002, ,877, Current Liabilities 7,559, ,591, ,859, Net Profit before Tax 12,859, ,318, ,304, Net Profit after Tax 12,859, ,318, ,304, Working capital (CURRENT ASSET- CURRENT LIABITIES) 26,002, ,412, ,018, Retained Earning 110,128, ,446, ,750, Earning before Interest and Tax 12,859, ,318, ,304, Book value of equity (NET WORTH)) 136,807, ,524, ,580, Sales (turnover) 310,036, ,447, ,987, Total Asset 144,365, ,115, ,439, Total Liabilities 7,559, ,591, ,859, T T T T T Z score Z mean Page 14

15 Appendix A6:Archlon Nigeria Extract from Financial Statement for Year Ended N N N Current Asset 35,599, ,689, ,413, Current Liabilities 292,811, ,047, ,278, Net Profit before Tax 4,920, ,465, ,973, Net Profit after Tax 4,705, ,249, ,614, Working capital (CURRENT ASSET- CURRENT LIABITIES) 6,317, ,641, ,135, Retained Earning - 2,617, ,632, ,246, Earning before Interest and Tax 4,920, ,465, ,973, Book value of equity (NET WORTH)) 78,747, ,996, ,959, Sales (turnover) 45,771, ,847, ,577, Total Asset 108,028, ,044, ,238, Total Liabilities 29,281, ,047, ,278, T T T T T Z score Z mean Page 15

16 Appendix A7:Filter Consult Limited Extract from Financial Statement for Year Ended N N N Current Asset 46,570, ,351, ,170, Current Liabilities 38,012, ,936, , Net Profit before Tax 21,005, ,434, , Net Profit after Tax 20,705, ,134, , Working capital (CURRENT ASSET- CURRENT LIABITIES) 3,454, ,963, ,912, Retained Earning 44,374, ,508, , Earning before Interest and Tax 21,005, ,434, , Book value of equity (NET WORTH)) 44,424, ,608, ,048, Sales (turnover) 88, ,702, ,000, Total Asset 82,268, ,326, ,291, Total Liabilities 24,154, ,230, , T T T T T Z score Z mean Page 16