EFFECT OF FIRM PRODUCTIVITY ON FINANCIAL PERFORMANCE OF FOODS AND BEVERAGES MANUFACTURING FIRMS IN NIGERIA

Authors: Asogwa, Joseph Okechukwu*, Professor Nwoha Ernest Chike, Nwankwo, Caroline Nkechinyere, PhD

ABSTRACT

The study investigated the effect of firm productivity on the financial performance of food and beverage manufacturing firms in Nigeria from 2011 to 2020. The specific objectives of the study are: to ascertain the effect of sales growth, sales per employee, and profit per employee on return on assets of foods and beverage manufacturing firms in Nigeria. A sample of eight (8) firms was selected from the fifteen (15) food and beverage manufacturing firms listed on Nigeria Stock Exchange during the period. The data collected from the selected firms were analysed using multiple regression analysis and t-statistics. Results from the study showed that the effect of all the independent variables (sales growth, sales per employee and profit per employee) on the returns on assets of the foods and beverage manufacturing firms are positive and statistically significant. The implication of these findings is that as sales growth, sales per employee and profit per employee increase, the return on assets of the firms also increases and vice versa. Based on these findings the study recommended that the managers of foods and beverage manufacturing firms in Nigeria should increase their sales growth by increasing sales revenue in order to increase return on assets. The study also recommended that the managers should produce high-quality goods, expand their firms’ distribution channels, and engage in advertising and sales promotion so as to increase sales per employee and return on assets. The study further recommended that the firm managers should increase profit per employee to increase return on assets and maximize wealth for shareholders of the firms. An increase in sales revenue, cost reduction, and engagement of a reasonable number of staff are some of the ways to increase profit per employee.

Keywords: Firm Productivity, Financial Performance, Food and Beverages firms, Nigeria

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