68
Table 9 (Continued)
DEBT
-0.011086
0.049592 -0.223546
0.8261
R-squared
0.835512
Mean dependent var
0.263789
Adjusted R-squared
0.802615 S.D. dependent var
0.059483
S.E. of regression
0.026427 Akaike info criterion
-4.244201
Sum squared resid
0.010476
Schwarz criterion
-4.045371
Log likelihood
44.31991 Hannan-Quinn criter.
-4.210551
Durbin-Watson stat
1.667502
Source:Eviews 9 computation of Research Data.
The results revealed that, loans and advances volume (LAV)
influences
selected institutions financial performance (ROA) and statistically significant
at 1% critical value, PV value is less than .05% which indicate that any change
positive or negative will have a significant effect on ROA. For example,
everything
being equal, any increase on loans and advances would lead to
0.971901 increase on the ROA vice versa all other factors unchanged.
Both Interest Rate (IR) and Debt ratio indicate an insignificant negative effect,
meaning that any increase shall lead to a small or no decrease in ROA. For
example, an increase on Interest rate would lead to about a 0.0994 decrease
on ROA everything being equal. R-Squared and Adjusted R-Squared recorded
an 83% and 80% respectively which indicates that the independent variables
significantly explained the dependent variable.
5.7 Diagnostic Tests Results
The test for stability, serial correlation and normality was conducted to examine
the validity and stability of the results and also to establish that, the selected
model can be used for policy formation and implementation.
