ASSET STRUCTURE AND FINANCIAL PERFORMANCE OF FAST-MOVING CONSUMER GOODS FIRMS IN NIGERIA

Abstract The nexus between asset structure and financial performance has gained significant attention in accounting and finance literature. While assets are recognized as crucial for a firm's profitability and growth, empirical findings on this relationship's strength and direction remain inconclusive due to variations in asset sources, industry patterns, firm characteristics, and research methodologies. This study examines this issue in Nigeria's 25 listed fast-moving consumer goods (FMCG) firms from 2012 to 2021. The study employs ordinary least square (OLS) model to examine the relationship between asset structure characteristics and financial performance (ROE). The asset structure was analyzed using four accounting ratios, and financial performance was measured using return on equity (ROE). The results demonstrate that fixed asset components (FATA and FATO) have a considerable positive influence on financial performance (ROE), accounting for 56.3% and 65.7% of each unit increase, respectively, but current asset components (CATA and CATO) have little to no effect on ROE. These findings corroborate prior studies emphasizing the importance of fixed assets as strategic drivers of financial performance.