Cost Control and Profitability of Selected Manufacturing Companies in Nigeria

Oyedokun, Godwin Emmanuel; Tomomewo, Amos Olafusi; Owolabi, Sunday Ajao

doi:10.33005/jasf.v2i1.31

Cited by 6 publications

(10 citation statements)

References 6 publications

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“…Net Profit Margin is a financial ratio that is also very important for investors in investment considerations. Profitability depends on a low cost on its potential to raise its profits and tame its expense structure by strategies of cost management (Oyedokun, Tomomewo, & Owolabi, 2019). To comprehensively perform the company's risk management approach, investors can identify the most critical processes and activities necessary to sustain the business's sustainability and meet its responsibilities to stakeholders in the event of a risk (Senkus & Górna, 2021).…”

Section: The Influence Of Npm On Stock Pricesmentioning

confidence: 99%

The Effect of Earning Per Share, Price to Book Value, Dividend Payout Ratio, and Net Profit Margin on the Stock Price in Indonesia Stock Exchange

Bustani

Kurniaty

Widyanti

2021

JMP

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Fundamental analysis of companies with financial ratios is essential in making investment decisions for any company. Therefore, to obtain maximum profit, investors need to perform a study before making investment decisions. This research aims to examine the effect of Earning Per Share (EPS), Price to Book Value (PBV), Dividend Payout Ratio (DPR), and Net Profit Margin (NPM) on the stock price. The research at the Indonesia Stock Exchange, a sub-sector of food and beverage companies, period five years (2014-2018). The sample of this study amounted to 12 companies from 26 companies in the population of food and beverage companies that have met the researchers' criteria. Data analysis with bootstrapping used SEM (statistical equation modeling) in hypothesis testing. The research findings confirmed the significant effect of Earning per Share, Price to Book Value, and Dividend Payout Ratio on stock prices. Meanwhile, the Net Profit Margin does not significantly affect stock prices in the study period, with an alpha significance of five percent. These findings imply practical implications that EPS, PBV, DPR, and NPM ratio information can be considered in investment decisions for anyone.

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Section: The Influence Of Npm On Stock Pricesmentioning

confidence: 99%

The Effect of Earning Per Share, Price to Book Value, Dividend Payout Ratio, and Net Profit Margin on the Stock Price in Indonesia Stock Exchange

Bustani

Kurniaty

Widyanti

2021

JMP

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“…Also, according to Dobni, andSand (2018) the adoption of business strategies is capable of improving the performance and profitability of organisation. Oyedokun, Tomomewo, and Owolabi (2019) from the result of their findings posits that business strategies will not only increase profitability of the business, but will help the profitability of the capital market in Nigeria's economic growth. Nakatani (2019) trying to use the business strategies theory to understand the diffusion of some strategic tools that has been used in the past; they examined the relationship between adopting these tools and firms' profitability in New Zealand.…”

Section: Discussion Of Findingsmentioning

confidence: 99%

Business Strategies: An Antidote to Firm Profitability of Selected Flour Milling Companies in Nigeria

Falana¹,

Egwakhe²,

Magaji³

et al. 2020

ijird

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The study of business strategies has drawn so much attention among business practitioners and academic researchers in the last two decades as globalization came fully into limelight. However, in Nigeria, there are few studies conducted to investigate the relationship between business strategies and firm profitability. This paper examined the effect of business strategies on profitability of selected flour milling companies in Nigeria. Data were collected through validated questionnaire administered to sixty eight respondents after establishing the reliability test. Multiple regression analysis was conducted to depict competitive advantage as a function of business strategies. The results (R 2 is 0.396 (F(6, 597) = 66.953, p=0.000) indicated that business strategies significantly affected profitability. However, the study also indicated that cost leadership (β = 0.288, t = 6.226, p<0.05), product differentiation (β = 0.283, t = 6.039, p<0.05) business diversification (β = 0.110, t = 2.415, p<0.05)and regrouping (β = 0.127, t = 2.933, p<0.05) have positive and significant effect on firm profitability in selected flour milling companies in Nigeria The result further showed that backward integration (β = 0.030, t = 0.779, p>0.05) has a positive and insignificant effect on firm profitability while market development (β =-0.015, t =-0.381, p>0.05) has a negative and insignificant effect on firm profitability in selected flour milling companies in Nigeria. The study recommends that production firms most especially the flour millers should integrate their business strategies with their day to day operations efficiently to enhance their backward integration, and market development they should also adopt the strategy/models that was developed in this study to align with their operations and target customers.

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“…Asaolu et al (2012) submitted that inventory are industrial goods that represent the major component of business cost and profitability. To increase profitability, the imminent need to reduce the cost of inventory that will eventually lead to a reduction in manufacturing cost should be one of the focal points of any firm (Oyedokun et al, 2019). In addition to the desired level of mark-up expected by the manufacturer, the determination of selling price for many consumer goods is often a function of the costs that were incurred during the manufacturing process.…”

Section: Conceptual Issues N Firm Costs Driversmentioning

confidence: 99%

“…Accordingly, labour cost is the amount of resources expended or sacrificed on manpower that helped to produce the specific goods or services. To Olayinka (2019), it is simply the monetary valuation of labour spent in producing goods or services. Labour cost can be fixed or variable components.…”

Section: Conceptual Issues N Firm Costs Driversmentioning

confidence: 99%

“…Fadare & Adegbie (2020) equally believe that the highly unstable state of the economy in Nigeria has adversely influenced the financial competitiveness and capacity of most manufacturing firms. As a consequence, the high cost of production also comprising inventory, selling and distribution and labour costs has made some firms in the household products industry to either curtail or entirely cease their scale of operation (Oyedokun et al, 2019).…”

Section: Introductionmentioning

confidence: 99%

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Drivers of Operating Profit: A Focus on Selected Firms’ Costs

Nworie

Nwoye

2023

CBR

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The study evaluates how selected firms' costs predict the directionality of operating profits of public listed consumer goods firms in Nigeria. Accordingly, the research intends to determine the effect of selling and distribution costs, cost of inventory and cost of labour on the operating profit ratio of the sampled firms. To achieve these objectives, the study adopts the ex-post facto research design. A total of 13 consumer goods firms was purposively sampled out of a population of 20 consumer goods firms that are listed on the floor of the Nigerian Exchange Group. Secondary data obtained from the 2011-2020 annual reports of the selected firms were analysed using descriptive statistics, correlation analysis and ordinary least square regression technique at 5% level of significance. Findings made showed that cost of inventory is positive, but does not significantly drive the operating profit ratio of public listed consumer firms in Nigeria, cost of labour is positive and significantly drives the operating profit ratio of public listed consumer firms in Nigeria, while selling and distribution costs are negative, but do not significantly drive the operating profit ratio of sampled firms. Based on these findings, the research concludes that when an effective costing system or technique has been established in the firm, there are efficient allocation and utilization of resources, which lead to minimization of costs and maximization of profit. It was therefore recommended that managers of consumer goods companies should strengthen envisaged control procedures to eliminate waste in their selling and distribution costs.

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Cost Control and Profitability of Selected Manufacturing Companies in Nigeria

Cited by 6 publications

References 6 publications

The Effect of Earning Per Share, Price to Book Value, Dividend Payout Ratio, and Net Profit Margin on the Stock Price in Indonesia Stock Exchange

The Effect of Earning Per Share, Price to Book Value, Dividend Payout Ratio, and Net Profit Margin on the Stock Price in Indonesia Stock Exchange

Business Strategies: An Antidote to Firm Profitability of Selected Flour Milling Companies in Nigeria

Drivers of Operating Profit: A Focus on Selected Firms’ Costs

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