Research Objective: This study examined the effect of asset growth on shareholders' wealth, represented by earnings per share (EPS), of industrial goods manufacturing firms in Nigeria between 2013 and 2022.
Methodology: The study employed a panel regression analysis. Asset growth was measured through property, plant and equipment (PPE), trade receivables, and inventory. Secondary data were collected from the annual reports of five firms—Nestle Nigeria Plc, UAC Nig. Plc, Unilever Nig. Plc, Nigeria Breweries Ltd, and Lafarge Africa Plc—randomly selected from a population of fifteen listed on the Nigeria Exchange Group.
Findings: The results indicated that PPE has a positive and significant effect on EPS, with a p-value of 0.0000 and t-statistics of 11.52391. Inventory showed a positive but non-significant effect on EPS (p-value = 0.1360; t-statistics = 1.520682), while trade receivables had a negative and significant impact on EPS, with a p-value of 0.0008 and t-statistics of -3.635688.
Conclusion: Investment in PPE significantly drives shareholders' wealth, contributing to long-term profitability. However, poor management of trade receivables negatively affects earnings, underscoring the need for effective handling of both receivables and inventory to sustain financial performance.
Recommendations: Manufacturing firms should prioritize investment in PPE to enhance profitability while implementing strategies to manage trade receivables efficiently. Effective inventory control also plays a crucial role in maintaining financial stability.
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