Impact of Financial Ratios on Firm Value of Listed Deposit Money Banks in Nigeria

This study examines the effect of financial ratios on firm value of listed deposit money banks in Nigeria for the period of five years (2019-2023). The study adopted ex-post facto research design and collected data using secondary sources. Specifically, from published annual reports of the selected listed banks in Nigeria. The population of this study is 14 listed deposit money banks where the entire population was considered as the sample using census sampling technique. The data gathered were analyzed using descriptive and inferential statistics including correlation and multiple regression analyses with the help of STATA version 14. The study found that current ratio and gross profit margin have significant positive effect on firm value. On the hand, the study found that debt to equity ratio has no significant relationship with firm value. In view of the findings, this study enjoined the Nigerian deposit money banks to evaluate their lending processes to ensure that loans are granted prudently and in line with the risk management policies. The study further suggests that despite the fact that debt to equity ratio does not strongly enhance firm value, it is still important and there is need for the deposit money banks in Nigeria to optimize their capital structure to ensure appropriate balance between debt and equity. Finally, the banks should consider adjusting pricing structures to maintain or increase gross profit margin without compromising market share.