International Journal for Tourism and Technology (IJTT)
Efficient investment in assets is a crucial factor in enhancing the financial performance of insurance companies which in turn can reposition the sector to contribute significantly to the growth of Nigerian economy. To that end, this study investigated the effect of assets investment on financial performance of listed insurance companies in Nigeria. The study employed an ex-post facto research design. The population of the study was fifteen (15) listed insurance companies in the Nigerian Exchange Group were sampled to five (5) using purposive sampling technique. The data used in this study was sourced from annual reports and statement of accounts of the selected companies between 2014 and 2023. The method of data analysis is descriptive statistic and multiple regression of Ordinary Least Square (OLS) with the help of SPSS. The study’s finding indicated that there is a significant effect of non-current assets investment on net profit margin, and there is an insignificant effect of current assets investment on net profit margin. Based on the findings, the study concludes that, there is a positive and significant effect between non-current assets investment and financial performance of listed insurance companies. It was suggested amongst others that, since non-current assets of the listed insurance companies has significant effect on net profit margin, this study therefore recommends that insurance companies in Nigeria should sustain their investment in non-current assets to enhance profitability.
Universally, the ultimate aim of every profit-making organization, irrespective of size, type or nature of business, is profit maximization. Shareholders are always profit-driven, the primary objective of every financial manager is to ensure that fund are judiciously invested with a singular aim of profit maximization. Financial performance in term ofprofitability evaluates the efficiency with which plant, equipment; and current assets are transformed into profit.Acquisitions of assets by firms are intended to increase their operational efficiency and value creation (Major et al., 2022; Ayewumi & chukwunweike, 2024). The composition of a firm’s assets and decisions made concerning them are major determinants of profitability for any business (Fitri & Marietza, 2024). Peterson (2023) simply defined assets as those things we purchase today that will bring future benefits. Oliver et al (2017) defined assets as “probable future economic benefits obtained or controlled by a particular entity as a result of past transactions or events. The United States Institute of Management Accountants defined assets as “any owned physical object (tangible) or right (intangible) having economic value to its owners; an item or source of wealth with continuing benefits for future periods, expressed, for accounting purposes, in terms of its cost, or other value, such as current replacement cost.One way of classifying assets is based on their ease of convertibility into cash. According to this classification, total assets are classified either into current assets or noncurrent assets (fixed assets). Other classifications are physical existence (tangible or intangible assets) and usage (operating and non-operating assets).
Assets Investment, non-current assets investment, current assets investment, net profit margin