Inventory Effectiveness and Nigeria Manufacturing Companies: Analysis with Return on Equity

Iranian Journal of Accounting, Auditing and Finance

مقاله 1، دوره 7، شماره 4 - شماره پیاپی 25، اسفند 2023، صفحه 1-12   

نوع مقاله: Original Article

شناسه دیجیتال (DOI): 10.22067/ijaaf.2023.43618.1291

نویسندگان

Tajudeen Adejare Adegbite^{* 1}؛ Surajdeen Tunde Ajagbe²

¹Department of Accounting, Al-Hikmah University, Ilorin, Kwara State, Nigeria

²Department of Banking and Finance, Al-Hikmah University, Ilorin, Kwara State, Nigeria.

چکیده

This study examined the impact of inventory management on the profitability of selected manufacturing companies in Nigeria. Specifically, the study determined the effect of inventory management on return on equity.  The data were sourced from annual published reports of ten selected companies. The data sourced were inventory, asset, revenue, equity, turnover, and profit after tax. The data collected were analyzed with panel data using random effect, fixed effect, regression, and correlation. The result showed that return on equity has a good correlation with inventory. Also, it was discovered from the analysis that according to the Fixed effect result, inventory positively affects return on equity. Still, the asset has a negative effect on Profitability. Turnover and equity have a significant positive effect on return on equity. Conclusively, inventory positively impacts return on equity in Nigerian manufacturing companies. It recommended that Nigerian manufacturing companies should not trivialize inventories but put more effort into the management of inventory so that the profitability of the company will be efficiently enhanced and increased at an increasing rate so that investors’ investment will be multiplied because rational investors discard unproductive company to accept the profitable companies.

کلیدواژه‌ها

Inventory؛ Profitability؛ Manufacturing Companies؛ Equity؛ Turnover؛ Non-current Asset