The Effect of Liquidity and Solvency on The     Performance of Ethiopian Commercial Banks

Yohannes Anteneh

dc.contributor.author	Yohannes Anteneh
dc.date.accessioned	2025-03-13T07:09:44Z
dc.date.available	2025-03-13T07:09:44Z
dc.date.issued	2024-11
dc.identifier.uri	http://ir.bdu.edu.et/handle/123456789/16614
dc.description.abstract	Objectively the study examines the effect of liquidity and solvency on the performance of Ethiopian commercial banks. The study adopted a quantitative research approach with explanatory design. The profitability of banks was measured and analyzed using ROA and ROE. The explanatory variables used in the study were current ratio, total deposit to total asset ratio, loan to deposit ratio, liquid asset to total asset ratio, debt to equity ratio and debt to asset ratio. And also two control variables GDP and inflation were included to investigate their effect on banks profitability. Secondary data was collected in panel form for 10 purposively selected commercial banks from NBE and audited financial statements of commercial banks for 11 years (2013-2023). Multiple linear regression models were adopted to examine the relationship. Data was analyzed using descriptive statistics and inferential analysis using E-views 10 software. The finding reveals that Loan to deposit ratio (LOD), and Liquid asset to total asset ratio (LA-TA) have positive and significant effect on (ROA). CR, TD-TA and GDP have negative and significant effect on (ROA,) On the other hand debit to equity ratio (DER), debit to asset ratio (DAR) and inflation have negative and insignificant effect on (ROA).The study also concludes that current ratio (CR) and debt to equity ratio (D-E) have a positive and significant effect on ROE. Total deposit to total asset ratio (TD-TA), (LO-D), (LA-TA), and debt to asset ratio (D-A) has a negative and significant effect on ROE. GDP and Inflation have negative and insignificant effect on ROE.The study recommends that Banks should improve current assets, preserve cash and reduce current liabilities and manager should know how and what liquidity and solvency structure will influence their performance.	en_US
dc.language.iso	en	en_US
dc.subject	Accounting and Finance	en_US
dc.title	The Effect of Liquidity and Solvency on The Performance of Ethiopian Commercial Banks	en_US
dc.type	Thesis	en_US