INTRODUCTION
The firm financial performance has
been the focus in the literature and often emphasized in policy debate with
many researchers associating it to entrepreneurship. Significantly, financial
performance of a firm, which translates into liquid assets whether generated by
the corporate cash flow from operations or by the attraction of new
shareholders is considered the most important source of business continuance in
the long-run. It has been one of the indicators most commonly used to define
the success and failure of management. Financial performance is a measure of
profitability that should be sustained, since firms cannot invest or expand
without profit. Markman (2002) remarked that growth used as a measure of
financial performance is based on the belief that growth is a precursor to the
attainment of sustainability, competitive advantage and profitability. This indicator
has been a concern to shareholders who invested in the business and a worry to
directors of the firm because the result reflects their capacity to keep the business
moving. A firm’s rate of growth is a function of the rate of profit and the rate
of interest when the firm is constrained in either the labour market or the
output market. The most widely emphasized goal of a firm is to maximize the
value of the firm to its owners which is the driving force that makes a firm to
succeed (Kannadhasan, 2002). The investment the government and private sponsors
are expected to make in an organization will depend on their social returns and
profitability potentials. Moreso, in a capitalist economy, there is one and
only one responsibility of a firm – to use its resources and engage in
activities designed to increase its profits as long as it stays within the
rules of the game, which is to say engage in an open and free competition
without deception or fraud.
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