DETERMINANTS OF PROFITABILITY OF FOREIGN COMPANIES IN NIGERIA- CHM

Department → Accountancy

Amount → ₦10,000.00

Abstract The study examined determinants of profitability of foreign companies in Nigeria. The study specifically examined the effect of accounts payables, export sales, account receivables and asset growth on the return on asset of foreign companies in Nigeria. Data for the study were sourced from annual reports and accounts of the sampled foreign companies in Nigeria. Data collected were analysed using multiple regression analysis, result of the analysis shows that account receivables (ACR) of the sampled firms positively and significantly affect Net income (NI) of foreign companies in Nigeria. This finding implies that as ACR increases, NI of the firms also increase and vice versa. That export sales (EXPS) of the selected firms positively and significantly affect net income (NI) of foreign companies in Nigeria. It was also observed that accounts payables (ACP) of the sampled firms positively, but insignificantly affect Net income (NI) of foreign companies in Nigeria.  The study also shows that assets growth  (AGT) of the selected firms negatively and insignificantly affect Net income (NI) of foreign companies in Nigeria. Based on the findings, the study recommends among others that devaluation of exchange rate in association with factors such as technology and human skills are necessary for a country to be established in the export market which are lacking in the case of Nigeria. The country should therefore, embark on improving basic amenities like electricity, transportation, water supply, telecommunication, human resource development, instead of implementing policies in an unhealthy economic and social structure.




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