Asset Structure and Profitability of Listed Manufacturing Firms in Nigeria

Abstract

This study was undertaken to examine the effect of asset structure on the profitability of listed manufacturing firms in Nigeria. It covered the period of 10 years from 2013 to 2022 and employed causal-comparative research design. From the target population of twenty (20) listed manufacturing firms in the consumer goods and industrial goods sectors of the Nigerian Exchange Group, the study utilized purposive sampling technique to select a sample of fifteen manufacturing firms. It gathered data from the annual reports of the sampled firms and analyzed with the aid of E-Views 10. It formulated four hypotheses and tested them by estimating fixed and random effect models which have return on assets and return on capital employed as dependent variables. Tangible non-current assets and current assets were the independent variables. The study revealed that tangible non-current assets have significant positive effects on return on asset and return on capital employed of the sample. It also found that current assets have significant positive effects on return on assets and return on returns on capital employed of the sample. Based on the finding of the study, it was recommended that the management of manufacturing firms in Nigeria should sustain the asset structure in place. The study suggest future studies should use more proxies of asset structure and profitability and longer sample period.

Keywords

• Asset Structure
• Tangible Non-current Assets
• Current Assets
• Profitability. Nigerian Exchange Group

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