A DIAGNOSTIC ANALYSIS OF THE PROBLEM AREAS OF PROFITABILITY AND PRODUCTIVITY

ABSTRACT

This study examined the performance of companies based on their profitability and productivity. The objectives was to carry out a diagnostic analysis on the problem areas affecting profitability and productivity performance of companies in Nigeria and find out if priority areas or departments like administration, marketing and production are problem areas affecting company’s productivity and profitability performance.This study considered a total of 6 companies from 3 different sectors this made up the sample size, the time frame covered a period of 5 years (2017-2021). Based on the hypotheses, company performance appraisal (CPA) was used to examine the problem areas affecting profitability and productivity performance of companies in Nigeria. The research questions raised for the study were answered using CPA trend and ratio analysis.The findings from the study was that administration, production and marketing department or priority affects companies profitability and productivity performance the administrative department as a problem area affecting company’s productivity and profitability performance.It was then recommended that  companies experiencing decreasing  cost of goods sold and operating expenses should maintain these ratios by continuously minimizing production and administrative costs to further boost their profitability, while those experiencing increasing operating  expense and cost of goods sold should also look into cutting administrative/marketing, if  fixed asset turnover is also decreasing the priority or problem area is production boosting productivity of these assets will  increase the sale per value of fixed asset  this will boost the company’s return on asset and profitability.