Empirical Analysis of Cost Management and Profitability of Manufacturing Companies in Nigeria
1Adesina, Olufemi Dadepo, 2Tiamiyu, Tesleem Ajibola
1Department of Accountancy, School of Business and Management Studies, Federal Polytechnic, Ile- Oluji, Ondo State, Nigeria
2Tiamiyu Tesleem Ajibola, Academic Planning Unit, Federal Polytechnic, Ile Oluji, Ondo State Nigeria,
1ORCID ID 0000-0001-9675-2941
https://doi.org/10.47191/jefms/v8-i2-60
ABSTRACT:
Cost management plays a crucial role in determining the profitability and sustainability of manufacturing firms. The purpose of this research is to analyse the relationship between cost management and the bottom line of Nigerian manufacturing firms, namely those producing industrial and consumer goods. This study uses descriptive statistics and panel regression analysis to examine the relationship between cost management variables and profitability indicators, such as Return on Assets (ROA), Return on Equity (ROE), and Net Profit Margin (NPM). The data for the study comes from the annual reports of companies listed on the Nigerian Exchange Group (NGX) from 2014 to 2023. Results show that administrative expenditures, marketing and distribution charges, and excessive production costs all cut into profits. The report suggests using AI-driven automation, lean manufacturing, and activity-based costing (ABC) to make things more efficient and save money. This study adds to the existing body of knowledge by recommending policies that would improve the industrial sector's financial performance in Nigeria and by incorporating modern methods of cost management.
KEYWORDS:
Cost Management, Profitability, Manufacturing Firms, Activity-based costing, Nigeria.
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