Abstract

After a decade of reforming policy, building and developing the multi-national market in Ghana, the GIPC introduced Ghana Club 100 to recognize the top 100 performing companies in Ghana by encouraging competition, enhancement of their products and services to improve the economic growth in the Ghanaian business industry. This study assessed the financial management practices, financial characteristics and the performance of Ghana Club 100 firms. Descriptive, correlational and casual research design were utilised for the study. Due to the nature of the research, pragmatic research approach was used by employing both quantitative and qualitative research methods. A sequential mixed research methods was used to gather data from 80 listed companies using questionnaire and secondary data for the quantitative data analysis and an interview guide was use to gather data from 10 selected companies out of the 80 firms for the qualitative data analysis based on the findings from the quantitative data analysis. Descriptive statistics, Pearson's correlation coefficient, multiple regression and logistic regression analysis was used to analyse data gathered on the financial management practices, financial characteristics and the performance of the listed companies using SPSS. NVivo software was used to analyse the qualitative data.
The findings from the quantitative analysis on the first objective explained that, majority of the firms implement financial management practices as they are able to prepare capital budgeting, support the use of AIS in their daily activities, report and analyze their financial statements monthly based on IFRS, practice effective working capital management and combine good capital structure to improve their performance. Financial characteristics was achieved as firms are able to manage liquidity to meet short term obligations, financial leverage is carefully chosen to prevent financial distress and firms are able to generate sales (business activity) from the company’s asset which enhanced their performance.
The second objective specified that, there was no statistical significant relationship between leverage and ROE. However, there was a statistical significant positive relationship between leverage and ROA. Also, there was no statistical significant relationship between liquidity and ROE as well as ROA. Moreover, there was no significant relationship between business activity and ROE but there was a statistical
iii
significant positive relationship between business activity and ROA. The third objective identified that, leverage, liquidity, and business activity had no significant impact on ROE. However, all the variables had significant positive impact on the ROA of the listed companies. The last objective explained that, all the variables of the financial management practices had no statistical significant influence on both ROA and ROE of the listed companies. In other to expand and strengthen the major conclusions of the quantitative analysis, there was the need to conduct a qualitative analysis. The findings from the qualitative analysis demonstrated that, the listed firms implement these practices as efficient financial management practices and characteristics greatly have positive influence on the performance of the companies, which had improve their financial health, growth and operational efficiency.
The study contribute to the body of knowledge by filling the gaps discovered within the knowledge of financial management practices since, there is no empirical evidence in Ghana on the investigation of the financial management practices, financial characteristics and their impact on the performance of companies listed on Ghana Club 100. The findings and contributions of this study identified many implications for the Ghanaian business industry and to further improve the financial management practices and characteristics of the listed companies in Ghana by enhancing their profitability and shareholder’s fund. This study believes that prudent financial management practices and financial characteristics can help companies listed on Ghana Club 100 improve their performance and for that matter stay in business for a long period of time.