CURRENT ASSETS INVESTMENT AND FINANCIAL PERFORMANCE OF LISTED INDUSTRIAL GOODS FIRMS IN NIGERIA

Abstract This study examines the impact of current assets investment on the financial performance of listed industrial goods firms in Nigeria from 2014 to 2023. The research aims to determine how the allocation of current assets influences key financial performance indicators such as Net Profit, Return on Assets (ROA), and Return on Equity (ROE). A sample of five industrial goods firms listed on the Nigerian Stock Exchange (NSE) was selected using a purposive sampling technique. A quantitative research approach was adopted, relying on secondary data from annual reports and financial statements of the selected firms. The study employed descriptive statistics, correlation analysis, and multiple regression analysis to evaluate the relationship between current assets investment and financial performance. The analysis was conducted using E-Views 8 software. The findings reveal a significant positive relationship between current assets investment and financial performance, suggesting that firms that efficiently manage their current assets tend to achieve higher profitability. However, excessive investment in current assets without corresponding efficiency measures was found to have a diminishing effect on profitability. The study concludes that effective management of current assets plays a crucial role in enhancing financial performance in the industrial goods sector. It recommends that firms adopt strategic working capital management practices, leverage technology for asset optimization, and maintain a balanced liquidity position to maximize returns. Additionally, policymakers are encouraged to enhance financial reporting standards to ensure greater transparency in asset management practices.