European Journal of Accounting, Finance and Investment

Relationship Between Profitability And Growth In Nigeria Manufacturing Firms

Sylvester I. Ejike, PhD, CNA, FAMSSRN

Lecturer Department of Accountancy, Enugu State University of Science and Technolog9y(ESUT) Enugu, Nigeria.

Ene Catherine Amoge

Enugu State University of Science and Technology

Keywords: Profitability, Growth, Manufacturing Firms

---

Abstract

The study is to examine the relationship between profitability and growth in manufacturing firms in Nigeria. It specifically examines the relationship between net profit margin and assets growth of manufacturing firms in Nigeria, and relationship between earnings per share and assets growth of manufacturing firms in Nigeria. Data for the study was sourced from Secondary sources from the published annual reports and accounts of the selected manufacturing firms listed on Nigeria Stock Exchange from 2008 to 2017. At the end of the study the researcher found out that there is a positive and significant relationship between net profit margin and total assets growth of manufacturing firms in Nigeria. There is a positive and significant relationship between earnings per share and total assets growth of manufacturing firms in Nigeria. Based on the findings, the study recommends among others that manufacturing firms in Nigeria should increase their net profit margin so as to grow their firms. This is because net profit margin positively and significantly relates with assets growth of the firms. The firms should increase net profit margin because the economic success is achieved by the magnitude of the net profit. The management should also be efficient in the use of organizational resources in adding value to the business.