Level of Financial Performance of Selected Construction Companies in South Africa

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dc.contributor.authorOmopariola, Emmanuel Dele
dc.contributor.authorWindapo, Abimbola
dc.contributor.authorEdwards, David John
dc.contributor.authorEl-Gohary, Hatem
dc.date.accessioned2021-11-29T15:23:43Z
dc.date.available2021-11-29T15:23:43Z
dc.date.issued2021-10-27
dc.date.updated2021-11-25T15:59:53Z
dc.description.abstract<b>Purpose</b>—There is no consensus on the indicators that assess a construction company’s financial performance projects undertaken. There is also a dearth of concepts on the financial performance indicators for construction companies in South Africa and indeed, the wider continent of Africa. This paper proposes novel financial performance indicators for assessing construction organizations and tests these on selected construction companies in the South African construction industry. Design/methodology/approach—This research employed a pragmatic approach. Contractors with financial credibility and capacity of ≥R 40 million, annual turnover of ≥R 20 million, and available capital of ≥R 40 million were purposively selected for this study. Parameters such as total revenue, direct cost of work, total indirect cost and total income were elicited from the sample contractors to assess their financial performance. The assessment was undertaken using formulas that were formulated based on the descriptions provided under the research methodology. Further analysis was conducted using post hoc Tukey’s honest significant difference (HSD). <b>Findings</b>—The study finds that construction companies with a strong structure, multiple areas of specialization, creative and efficient staff members, and access to funding, have a greater chance of experiencing higher: income; positive leverage; positive liquidity; and positive cash flow. Moreover, companies with specialization in civil engineering construction and project management skills experienced higher positive liquidity and profitability. <b>Originality/value</b>—This research is unique through its investigation and formulation of indicators for assessing the financial performance of construction companies. This research is consequently representing the first attempt to analyze financial data using the approaches prescribed and adopted.en_US
dc.identifierdoi: 10.3390/jrfm14110518
dc.identifier.apacitationOmopariola, E. D., Windapo, A., Edwards, D. J., & El-Gohary, H. (2021). Level of Financial Performance of Selected Construction Companies in South Africa. <i>Journal of Risk and Financial Management</i>, 14(11), 518. http://hdl.handle.net/11427/35397en_ZA
dc.identifier.chicagocitationOmopariola, Emmanuel Dele, Abimbola Windapo, David John Edwards, and Hatem El-Gohary "Level of Financial Performance of Selected Construction Companies in South Africa." <i>Journal of Risk and Financial Management</i> 14, 11. (2021): 518. http://hdl.handle.net/11427/35397en_ZA
dc.identifier.citationOmopariola, E.D., Windapo, A., Edwards, D.J. & El-Gohary, H. 2021. Level of Financial Performance of Selected Construction Companies in South Africa. <i>Journal of Risk and Financial Management.</i> 14(11):518. http://hdl.handle.net/11427/35397en_ZA
dc.identifier.ris TY - Journal Article AU - Omopariola, Emmanuel Dele AU - Windapo, Abimbola AU - Edwards, David John AU - El-Gohary, Hatem AB - <b>Purpose</b>—There is no consensus on the indicators that assess a construction company’s financial performance projects undertaken. There is also a dearth of concepts on the financial performance indicators for construction companies in South Africa and indeed, the wider continent of Africa. This paper proposes novel financial performance indicators for assessing construction organizations and tests these on selected construction companies in the South African construction industry. Design/methodology/approach—This research employed a pragmatic approach. Contractors with financial credibility and capacity of ≥R 40 million, annual turnover of ≥R 20 million, and available capital of ≥R 40 million were purposively selected for this study. Parameters such as total revenue, direct cost of work, total indirect cost and total income were elicited from the sample contractors to assess their financial performance. The assessment was undertaken using formulas that were formulated based on the descriptions provided under the research methodology. Further analysis was conducted using post hoc Tukey’s honest significant difference (HSD). <b>Findings</b>—The study finds that construction companies with a strong structure, multiple areas of specialization, creative and efficient staff members, and access to funding, have a greater chance of experiencing higher: income; positive leverage; positive liquidity; and positive cash flow. Moreover, companies with specialization in civil engineering construction and project management skills experienced higher positive liquidity and profitability. <b>Originality/value</b>—This research is unique through its investigation and formulation of indicators for assessing the financial performance of construction companies. This research is consequently representing the first attempt to analyze financial data using the approaches prescribed and adopted. DA - 2021-10-27 DB - OpenUCT DP - University of Cape Town IS - 11 J1 - Journal of Risk and Financial Management LK - https://open.uct.ac.za PY - 2021 T1 - Level of Financial Performance of Selected Construction Companies in South Africa TI - Level of Financial Performance of Selected Construction Companies in South Africa UR - http://hdl.handle.net/11427/35397 ER - en_ZA
dc.identifier.urihttp://hdl.handle.net/11427/35397
dc.identifier.vancouvercitationOmopariola ED, Windapo A, Edwards DJ, El-Gohary H. Level of Financial Performance of Selected Construction Companies in South Africa. Journal of Risk and Financial Management. 2021;14(11):518. http://hdl.handle.net/11427/35397.en_ZA
dc.language.isoenen_US
dc.publisher.departmentDepartment of Construction Economics and Managementen_US
dc.publisher.facultyFaculty of Engineering and the Built Environmenten_US
dc.rights.urihttp://creativecommons.org/licenses/by/4.0/en_US
dc.sourceJournal of Risk and Financial Managementen_US
dc.source.journalissue11en_US
dc.source.journalvolume14en_US
dc.source.pagination518en_US
dc.source.urihttps://www.mdpi.com/journal/jrfm
dc.titleLevel of Financial Performance of Selected Construction Companies in South Africaen_US
dc.typeJournal Articleen_US
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