ASSET MANAGEMENT AND FINANCIAL PERFORMANCE OF LISTED PHARMACEUTICAL FIRMS IN NIGERIA

Objective: The main objective of the study was to investigate the effect of Assets Management on Financial Performance of listed Pharmaceutical firms in Nigeria. Specifically, the study examined the effect of account receivables turnover ratio, inventory turnover ratio, non-current asset turnover ratio, cash to turnover ratio and prepayments turnover ratio on the profit for the year of listed pharmaceutical firms in Nigeria. Theoretical Framework: The main theoretical underpin to this study is the assets profitability theory that held that tradeoff between the several components of the current and noncurrent assets has several implication for the risk, bankruptcy cost and the performance of the firm. Method: The study adopted ex-post facto design. Data were generated from the audited financial reports of the eight selected listed pharmaceutical firms in Nigeria from 2010 to 2021. The data was analyezd using Fit-Generalized-Least Square (FGLS) Multiple Regression Model of Stata 14.2. Results: The results revealed that the inventory turnover ratio and noncurrent assets to turnover ratio exhibited significant negative effects on profit to turnover ratio; account receivables to turnover ratio, cash to turnover ratio and prepayment to turnover ratio displayed an insignificant negative effect on profit to turnover ratio. This implies that the asseis management strategies of the listed pharmaceutical firms in Nigeria is currently inefficient and impact negatively on the their financial performance. Research Implications: This study has exposed an internal management inefficiencies that contributed to the poor financial performance of the Pharmaceutical firms in Nigeria. Using the concept of asset profitability theory to moderate the assets management ratios modelled in this study in the firms will help to reposition the liquidity and profitability positions of the firms Originality/Value: This study used the profit to turnover ratio as a dependent variable. This variable closed the gap between profitability and efficiency in the use of company resources to generate turnover as well as profit and a deviation from traditional measures (return on assets, return on equity and earnings per share) which has dominated the financial performance research. The study widened the scope of assets management research in Nigeria and Pharmaceutical firms in particular.