EFFECT OF ASSET GROWTH ON FINANCIAL PERFORMANCE OF CONSUMER GOODS FIRMS IN NIGERIA
The strategic management of asset growth in firms enable companies to increase their revenue generation and reduce operation cost and ensure sustainable profit overtime. This study is to examine the effect of asset growth and financial performance of consumer goods firms in Nigeria. Fourteen consumer goods firms were selected from Nigeria Exchange Group, and secondary data was collected from the firms for a ten-year period (2013 – 2022). The data were analyzed using Descriptive analysis and Panel fixed effect Regression analysis. Non-current assets growth, current assets growth, net assets growth, and total asset growth were used as proxies for asset growth (independent variables), while return on assets (ROA) and return on equity (ROE) were used as proxies for financial performance (dependent variable). The result shows that the non-current assets growth rate and current asset growth have a significant positive effect on the ROA and ROE of consumer goods firms in Nigeria. Findings also show that total asset growth has an insignificant effect on ROA and ROE. On the other hand, findings revealed that while net asset growth is insignificant to ROA, the outcome is significant and positive to ROE. Based the findings, the study recommends that consumer goods ought to adopt effective inventory management systems to sustain an optimal level of current assets, particularly in the consumer products sector where stock turnover is essential. By minimising surplus inventory and enhancing stock rotation, companies can liberate capital, decrease storage expenses, and augment liquidity, so positively influencing financial performance.
Asset Growth, Current Asset Growth, Non-Current Asset Growth, Net Asset Growth, ROA, ROE.