Investment in Capital Expenditure and the Financial Performance of Listed Consumer Manufacturing Firms in Nigeria
Keywords:
Capital Expenditure, Non-current Turnover Ratio, Capital Intensity Ratio, ROEAbstract
This study examined Investment in Capital Expenditure and the Financial Performance of Selected Listed Consumer Manufacturing Firms in Nigeria. The researcher adopted the ex-post facto research design methodology for this study. This study uses secondary data from the annual reports of five (5) selected listed firm, sampled through the convenience sampling technique. The data obtained were time series from 2012-2023 and were analysed using the multiple linear regression analytical models. The findings revealed that Non-current Turnover Ratio (NATR) had a negative non-significant effect on the Return on Equity, Capital Intensity Ratio (CIR) had a negative significant on the Return on Equity, while combined analysis of both variables brought about a negative and significant effect on the Return on Equity of the selected firms. In conclusion, increasing the Capital expenditure Investment without corresponding increase in its efficiency to generate sales, or optimum efficiency with both metrics alongside poor profit-making strategies will result to poor returns for shareholders in the current year of the acquisition of capital expenditure and in future years of its usage. One of the recommendations directed to management was on the focus of improving overall asset efficiency and cost management. It involves not only optimizing the use of non-current assets but also ensuring that capital is deployed in a manner that maximizes returns.
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