Abstract
Research Purpose: With healthcare expenditure rising globally, understanding the drivers of profitability in the pharmaceutical industry is crucial. This study investigates the impact of non-current assets on the profitability of quoted healthcare manufacturing firms in Nigeria, a rapidly growing market with a significant unmet healthcare demand.
Methodology: An ex-post-facto research design was employed, utilising cross-sectional data sourced from the financial statements of selected healthcare manufacturing firms between 2015 and 2022. Profit after tax served as the proxy for profitability, while investment in property, plant and equipment, intangible assets, and investment in subsidiaries represented non-current assets. Multiple regressions using the Ordinary Least Squares method were conducted for data analysis.
Findings: The results revealed a positive relationship between property, plant and equipment and investment in subsidiaries with profit after tax for the selected healthcare firms. Conversely, investment in intangible assets demonstrated a negative relationship with return on assets.
Conclusion: The findings suggest that property, plant and equipment and investment in subsidiaries have a positive effect on profitability, while investment in intangible assets has a negative impact.
Recommendations: Managers should prioritise the effective management, evaluation, and investment in property, plant and equipment. Additionally, a positive approach towards intangible asset disclosure is recommended to accurately reflect their value within organisations. Policies should be implemented to guide the management of investment in intangible assets. Furthermore, proper accounting policies should be adopted for the valuation of intangible assets in healthcare firms, and managers should ensure the efficient management of subsidiary investments in the Nigerian healthcare manufacturing sector.
Key words: Non-current Assets, Profitability, Health-care Firms and Nigeria.
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