Assets Utilization and Performance of Manufacturing Firms in Nigeria

Abstract

This study examined the effect of assets utilization on performance of selected manufacturing firms in Nigeria. Secondary data were collected from the annual report and accounts of the ten selected quoted firms for a period of five years spanning from 2012 to 2016. Data collected were analyzed using descriptive statistics, correlation and regression analyses. The empirical results revealed that asset turnover(ATR) has positive and significant effect on return on assets (ROA) of the selected manufacturing firms as confirmed by the coefficient and probability value of 0.235999(p=0.0000). Current assets ratio also has positive and significant effect on return on assets with the coefficient of 0.109040 (p=0.0035) while debt assets ratio has negative but insignificant effect on return on assets. The overall coefficient of determination (R2)of 0.84951showed that about 85 % of the total variation in the ROA is explained by asset turnover (ATR), current ratio (CUR) and debt-assets ratio (DAR). The study concluded that assets utilization has positive and significant effect on the performance of manufacturing firms in Nigeria and therefore recommended that attention should be purposely paid to optimum asset utilization in the manufacturing firms in Nigeria.