Effect of Firms’ Growth Variables on Corporate Valuation of Manufacturing Sector in Nigeria

Abstract

The main objective of this study is to effect of firms’ growth variables on corporate valuation of manufacturing sector in Nigeria. A sample of five (5) firms was selected from the thirty seven (37) manufacturing firms quoted on the Nigeria Stock Exchange Market (NSE). Secondary data were collected from the firms for ten years period (2007 to 2016). The data were analyzed using multiple regression analysis whereby sales growth, assets growth, cost of sales growth were the independent variables and proxies firm growth while net assets per share was the dependent variable and proxy for firm valuation. Findings show that sales growth, assets growth of manufacturing firms in Nigeria positively and strongly affect net assets per share of the firms during the period. Finding also shows that cost of sales growth of manufacturing firms in Nigeria positively, but insignificantly affects net assets per share of the firms. It was recommended that manufacturing firms in Nigeria should increase their sales in order to improve their net assets per share and hence their firm value, that Nigeria manufacturing firm managers can improve their firm net asset per share by increasing its total assets. Lastly, that manufacturing firms in Nigeria should improve their firm value by increasing its productivity.

Keywords: Firm, Growth Variables, Firm’s Valuation, Manufacturing Sector, Niger