ASSET UTILIZATION AND RETURN ON EQUITY OF QUOTED MANUFACTURING FIRMS IN NIGERIA

Abstract

The objective of the study is to determine the relationship between asset utilization and dividend per share with a view to understanding the effect of asset utilization on equity return of consumer goods quoted manufacturing firms in Nigeria.

The study used the ex-post facto research design and content analysis. The choice of design was based on the fact that the dependent variable (return on equity) already exists. The research nature was longitudinal in nature because the subjects were not randomly assigned, that is, they were grouped based on a particular characteristic or trait such as listed on Nigerian Stock Exchange. The population of the study is the manufacturing firms that were listed on Nigeria stock Exchange out of which 18 consumer goods were purposively selected. Data were sourced from the secondary means such as financial statements and official websites of the firms.

The result of the study showed that there is a positive relationship between asset utilization and equity return of the quoted consumer goods manufacturing firms in Nigeria.

The study concluded that the utilization of asset is a major predictor of equity return of the selected firms and the better the assets are put to use, the better the return that will get to the providers of equity capital.