Research Purpose: This study explores the relationship between fund allocation among different assets and asset classes and the financial performance of consumer goods organisations. It aims to determine whether fund allocation choices impact the return on assets (ROA) and net profit margin (NPM) of these firms.
Methodology: The study adopts an ex-post-facto research design, analysing data from 15 consumer goods firms selected via cluster sampling from a population of 35 firms, covering the period from 2012 to 2021. Data were analysed using pooled Ordinary Least Squares (OLS) regression.
Findings: The results indicate that fund allocation choices have an insignificant effect on the return on assets (ROA) and net profit margin (NPM):
Conclusion: The findings suggest that the choices made in fund allocation among different assets and asset classes do not significantly impact the financial performance of consumer goods firms in terms of ROA and NPM.
Recommendations: Management should focus on distributing funds among assets and asset classes in a way that promotes the efficient and effective use of resources. Strategic allocation of funds between current and noncurrent assets is essential to achieve better organisational performance.
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