The effect of Compound Annual Asset Growth Rate on Firm Profitability in Nigeria

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

Abstract         

The study examined Effect of Compound Annual Asset Growth Rate on Firm Profitability in Nigeria.  Specifically, the study sought to examine the effect of Compound Annual Growth Rate 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 Compound Annual Growth Rate does not significantly affect the Profit for the year of firms in Nigeria (where the t-value = 0.315629 and P-value of 0.7535). The study concluded that the effect of asset growth rate on the financial performance of oil and gas firms 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 non-significant impact of Compound Annual Growth Rate (CAGR) on profitability, Nigerian firms should reassess their growth strategies. Instead of solely focusing on achieving steady growth, firms should prioritize efficiency and profitability. This involves optimizing operational processes, controlling costs, and diversifying revenue streams

Keywords: Compound Annual Growth Rate, Asset Growth Rate, Firm Profitability, Financial Performance, Oil and Gas Firms.