Effect of asset growth dynamics on firm profitability in Nigeria

• Post by: birpo
• February 16, 2026
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Israel, Godsent Ijeoma Ph.D.

Abstract         

The study examined the Effect of asset growth dynamics on firm profitability in Nigeria. Specifically, the study sought to examine the effect of current asset growth rate on the Profit for the year of firms in Nigeria and analyse the effect of Annual Asset Growth Rate of Assets on the Profit for the year of firms in Nigeria. To achieve these objectives, five research questions and hypotheses were raised. Relevant conceptual, theoretical and empirical literatures were examined. Ex post facto research design was employed. The data used in this study were sourced from annual reports and accounts of the selected firms. Descriptive statistics and ordinary least Square regression were employed in analyzing the data. The study found that Current asset growth rate has no significant effect on the Profit for the year of firms in Nigeria (where t-value of -1.025368 and P-value of 0.3098), that Annual Asset Growth Rate has no significant effect on the Profit for the year of firms in Nigeria (Based on the t-value of -1.180276 and P-value of 0.2432). The study concluded that the effect of asset growth dynamics on firm profitability in Nigeria reveals a nuanced relationship. The findings indicate that while asset growth is theoretically crucial for enhancing firm value and operational capacity, it does not significantly impact profitability in the Nigerian oil and gas sector. The study recommended among other things that given the lack of significant impact of current asset growth on profitability, Nigerian firms should prioritize optimizing current asset management practices. This includes improving inventory control, streamlining receivables management, and maximizing cash flow efficiency.

Keywords: Asset growth dynamics, Firm profitability in Nigeria, Current asset growth rate, Annual asset growth rate, Profit for the year, Financial performance analysis, Oil and gas sector Nigeria.