Cost Reduction Techniques on Firm Performance of Selected Quoted Manufacturing Companies in Nigeria

Abstract

The operational level managers are always faced in identifying the technique that would help in reducing this cost. Based on this challenges this study examines into the impact of cost reduction techniques on firm performance of selected quoted manufacturing companies in Nigeria. The study employed panel data that was sourced within 2018 to 2022, from the audited financial statement of ten consumer goods companies listed on the Nigeria Stock Exchange. The panel (static) regression analysis was employed to determine inference between the dependent variable and independent variable. The Eview 10 was employed. The findings reveals that administrative cost and Changes in material cost has negative significant effect on Net profit margin while Changes in turnover has positive significant effect on Net profit margin. It is therefore recommended that companies should focus on reducing administrative cost while still maintaining needful administrative functions like streamlining production process, outsourcing non-core functions and implementation of technology solutions. The companies should focus on cost reduction strategies, budget control, managing materials cots like supplier management and in the long-run boost turnover.