METHODOLOGY
The study used the entire population of 16 deposit money banks. Data
were collected (2011- 2015) from the annual accounts and report of these
banks. Partial Least Square’s (PLS) Structural Equation Model was used
for the analysis of the data collected. Using the PLS-SEM, two broad
techniques of data analysis were used to analyse the data generated for
the study. These are the analysis of the measurement model and
structural model.
SEM is used to find the simultaneous relationship between the variables
of this study. SEM technique allows researchers to examine series of
relationships simultaneously. It attempts to minimize between the sample
covariance and the reproduces covariance matrix of observed measures.
That’s why it follows the assumptions of normality and independence.
Partial Least Square is as a non-parametric SEM technique described as
second generation multivariate analysis (Fornell, 1987). It is useful
when theoretical knowledge is scarce and theory confirmation is the
objective. It is quit suitable for this study because in this study the
authors’ objective is to confirm the newly proposed relationship by
extended VAIC and capital structure with financial performance.
The quantitative variables of the study are expressed in terms of latent
and exogenous constructs as appeared on the table below: