LEAN ACCOUNTING PRACTICE AND FINANCIAL PERFORMANCE OF LISTED MANUFACTURING FIRMS IN NIGERIA

Abstract

This study examined the relationship between Lean Accounting Practice and Financial Performance of listed manufacturing firms in Nigeria. Lean Accounting Practice was operationalized through Fair Value of Financial Assets and Fair Value Gain or Loss, while Financial Performance was measured using Return on Assets and Return on Equity. The study adopted an ex-post facto research design and utilized secondary data extracted from the audited annual reports and financial statements of ten (10) purposively selected listed manufacturing firms quoted on the Nigerian Exchange Group (NGX) covering the period 2019–2025. The data comprised 70 firm-year observations and were analyzed using Spearman's Rank Order Correlation Coefficient with the aid of the Statistical Package for Social Sciences (SPSS) Version 22.0 at a 0.05 level of significance. The findings revealed a significant positive relationship between Fair Value of Financial Assets and Return on Assets (rho = 0.781, p = 0.000). The study also found a significant positive relationship between Fair Value of Financial Assets and Return on Equity (rho = 0.742, p = 0.000). Furthermore, the findings showed a significant positive relationship between Fair Value Gain or Loss and Return on Assets (rho = 0.718, p = 0.000) and a significant positive relationship between Fair Value Gain or Loss and Return on Equity (rho = 0.689, p = 0.001). The study concluded that effective application of lean accounting practices significantly enhances the financial performance of listed manufacturing firms by improving asset valuation, financial transparency, profitability, and shareholders' returns. Consequently, the study recommended that listed manufacturing firms should strengthen the measurement of Fair Value of Financial Assets, ensure timely recognition of Fair Value Gains or Losses in accordance with International Financial Reporting Standards (IFRS), and that regulatory authorities should intensify monitoring of compliance with fair value measurement requirements to improve corporate financial performance.

This study examined the relationship between Lean Accounting Practice and Financial Performance of listed manufacturing firms in Nigeria. Lean Accounting Practice was operationalized through Fair Value of Financial Assets and Fair Value Gain or Loss, while Financial Performance was measured using Return on Assets and Return on Equity. The study adopted an ex-post facto research design and utilized secondary data extracted from the audited annual reports and financial statements of ten (10) purposively selected listed manufacturing firms quoted on the Nigerian Exchange Group (NGX) covering the period 2019–2025. The data comprised 70 firm-year observations and were analyzed using Spearman's Rank Order Correlation Coefficient with the aid of the Statistical Package for Social Sciences (SPSS) Version 22.0 at a 0.05 level of significance. The findings revealed a significant positive relationship between Fair Value of Financial Assets and Return on Assets (rho = 0.781, p = 0.000). The study also found a significant positive relationship between Fair Value of Financial Assets and Return on Equity (rho = 0.742, p = 0.000). Furthermore, the findings showed a significant positive relationship between Fair Value Gain or Loss and Return on Assets (rho = 0.718, p = 0.000) and a significant positive relationship between Fair Value Gain or Loss and Return on Equity (rho = 0.689, p = 0.001). The study concluded that effective application of lean accounting practices significantly enhances the financial performance of listed manufacturing firms by improving asset valuation, financial transparency, profitability, and shareholders' returns. Consequently, the study recommended that listed manufacturing firms should strengthen the measurement of Fair Value of Financial Assets, ensure timely recognition of Fair Value Gains or Losses in accordance with International Financial Reporting Standards (IFRS), and that regulatory authorities should intensify monitoring of compliance with fair value measurement requirements to improve corporate financial performance.