A COMPARATIVE STUDY OF FINANCIAL MANAGEMENT PRACTICES ON THE PERFORMANCE OF QUOTED MANUFACTURING AND OIL AND GAS FIRMS IN NIGERIA

Abstract

This study carried out a comparative study on influence of the financial management practices on the performance of the quoted manufacturing and oil and gas firms in Nigeria. The study specifically assessed the financial management practices and return on equity of the manufacturing firms to determine whether they are significantly different from those of oil and gas firms. The ex post facto research design was used. Data were obtained from the annual reports and accounts of the sampled firms of both sectors for the period 2006-2020. A purposive simple random sampling was adopted to select sample from 52 manufacturing firms and 11 oil and gas firms. Descriptive statistics and multiple regression model were used to analyze the data. The findings showed that strategic financial management practices jointly had significant effect on return on equity of listed manufacturing (Adj. R2 = 0.0046, Chi2(5) = 64.07, p < 0.05) and oil and gas firms (Adj. R2 = 0.555, F(5,114) = 30.78, p < 0.05). The regression results revealed that debt finance has a positive and insignificant relationship with return on equity of both sectors. Investing activities, dividend payout, working capital, and total asset turnover had negative effect on return on equity of the manufacturing firms but positive effect in oil and gas firms in Nigeria. The study recommended that the investors should consider appropriate variables that help them determine choice of a sector for investment purpose before they commit their hard earned resources