THE EFFECT OF ASSET MIX ON FINANCIAL PERFORMANCE OF INDUSTRIAL GOODS FIRMS IN NIGERIA: AN ENTREPRENEURIAL FINANCE PERSPECTIVE

Abstract

This study investigated the impact of asset mix over a ten-year period (2013–2022) on the financial performance of Nigerian listed industrial goods companies. Return on Assets (ROA) was used to gauge financial performance, and Current Asset Ratio (CART), Non-Current Asset Ratio (NCART), Intangible Asset Ratio (INTART), and Investments Asset Ratio (INVART) were used as proxies for asset mix. Ten purposefully chosen industrial companies listed on the Nigerian Exchange Group provided secondary data from their published annual reports and accounts, and an ex post facto research design was used. The study used multiple regression analysis utilizing the Ordinary Least Squares (OLS) method with E-Views 9.0, panel unit root tests, diagnostic tests, and descriptive statistics. The results showed that whereas CART had a negative and statistically negligible impact on ROA, NCART, INTART, and INVART had a positive and statistically significant effect. The asset mix factors collectively explained almost 15% of the variability in the financial performance of the selected enterprises, according to the coefficient of determination. The study concludes that the asset mix has a major impact on the financial performance of Nigerian traded industrial goods companies. As a result, the study recommends that businesses should keep their asset composition an optimal balance, focusing on investment, intangible, and productive non-current assets while avoiding excessive liquidity that could result in idle resources. By presenting actual data from Nigeria's industrial sector, the study adds to the body of literature already in existence and provides useful information on efficient asset allocation techniques for investors, corporate managers, and policymakers.