The effect of IFRS on the financial ratios: Evidence from banking sector in the emerging economy

Figures & data

Table 1. Variables and their measurement

Variables	Symbol	Measurement
Return on assets of Ethiopian banks	ROA	Net income after tax to total asset of banks (Rao & Tekeste, 2012).
Return on equity of Ethiopian banks	ROE	Net income after tax to total equity of banks (F. Brigham & Houston, 2004).
Liquidity ratio /current ratio/ of Ethiopian banks	LR	Current asset to current liability of banks (Tariq et al., 2014).
Leverage of Ethiopian banks	LEV	Total debt to total equity of banks Mehari & Aemiro, 2013).

Table 2. Descriptive statistics

	N	Minimum	Maximum	Mean	Std. Deviation
GAAP ROA	85	.01100	.29000	.0509869	.06811272
IFRS ROA	85	.00195	.31400	.0397009	.05627828
GAAP ROE	85	.00011	.35000	.1500867	.07630785
IFRS ROE	85	.02100	.45620	.1795506	.06667738
GAAP LR	85	.14800	1.52000	.5411906	.29953713
IFRS LR	85	.56000	1.30700	.8556741	.14392458
GAAP LEV	85	.12900	1.89000	.8400435	.16129998
IFRS LEV	85	.26800	.98500	.8612191	.09,298,626

Table 3. Tests of normality

	Kolmogorov-Smirnov^a			Shapiro-Wilk
	Statistic	Df	Sig.	Statistic	df	Sig.
GAAP ROA	.406	68	.000	.584	68	.000
IFRS ROA	.358	68	.000	.446	68	.000
GAAP ROE	.097	68	.000	.957	68	.020
IFRS ROE	.170	68	.000	.805	68	.000
GAAP LR	.086	68	.000	.948	68	.007
IFRS LR	.116	68	.024	.947	68	.006
GAAP LEV	.274	68	.000	.545	68	.000
IFRS LEV	.232	68	.000	.600	68	.000

* This is a lower bound of the true significance.

^aLilliefors Significance Correction

Table 4. Wilcoxon signed rank test

	IFRS ROA—GAAP ROA	IFRS ROE—GAAP ROE	IFRS LR—GAAP LR	IFRS LEV—GAAP LEV
Z	−1.096^b	−2.910^c	−7.177^c	−2.773^c
Asymp. Sig. (2-tailed)	.273	.004	.000	.006

^aWilcoxon Signed Ranks Test

^bBased on positive ranks.

^cBased on negative ranks.

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