August 2013 Vol. 1 No. 1

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Full Length Research Paper

Relationship between assets utilization and corporate profitability: A case study of food and beverage industry quoted on the Nigerian stock exchange

Dr. Alayemi Sunday Adebayo

School of Business and Management Studies, Federal Polytechnic Offa, Kwara State Nigeria.

E-mail: alayemisa@yahoo.com

Accepted August 19, 2013

Abstract

This study examined the relationship between assets utilization and corporate efficiency: A case study of food and beverage industry on the Nigerian Stock Exchange. No matter the different of industry, scale, management mechanism and management level should have their own assets structure because without assets production cannot take place. The general objective of this study is to find out the relationship between assets utilization and corporate efficiency. In addition, six other objectives are to be achieved by the study. The population of the study is made up of all the firms in food and beverage industry quoted on the Nigerian stock Exchange. Stratified sampling method was used to select the sample selected. Out of 21 companies two-third of the company was selected for study. The study adopted ex-post facto research design method. Secondary data collected from the financial statement of the sampled companies from 2007-2011 using STATA12 to analyzed the data. Multiple regression was used to determine the magnitude and statistics of the coefficient of the independent variables using this model ROA=α+β1(DRTO)+β2(INVTO)+β3(DEPASSET)+β4(DEPSALES)+β5(SALESPLANT)+ β6(PLANTASSET)+ε. The result of hypotheses showed that only hypothesis one which says that there is no significant relationship between return on asset and debtors’ turnover was accepted.

Keywords: Assets utilization, corporate efficiency, returns on assets, management, production.