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Volume 12 Issue 4, October-December 2024 
ISSN: 2836-9416 
Impact Factor: 5.57 
Journal Homepage: https://americaserial.com/Journals/index.php/ARJEFM, 
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ASSET MANAGEMENT AND FIRM VALUE OF LISTED OIL AND 

GAS FIRMS IN NIGERIA 
 

1Oranefo Patricia C. and 2Uzochukwu Ezekwere 
1Department of Accountancy, Nnamdi Azikiwe University, Awka, Anambra State 

2Department of accounting, Kingsley Ozumba Mbadiwe University, Ideato, Imo State 

Email: rollandchi@gmail.com; uzochukwu.ezekwere@komu.edu.ng 
                                            DOI: https://doi.org/10.5281/zenodo.14222101 

 

 

Abstract: The study determined the effect of asset management on the firm value of listed oil and 

gas firms in Nigeria, using fixed asset turnover ratio and total asset turnover ratio affect the Tobin’s 

Q of listed oil and gas firms in Nigeria. Ex-post facto design was adopted in the study. The sample 

for this study was determined through purposive sampling, selecting five out of the population of 

nine (9) listed oil and gas firms in Nigeria. The secondary data for the study were collected from the 

annual reports of the firms over a ten year period from 2014 to 2023. Data were analyzed using 

descriptive statistics and tested the hypotheses with ordinary least squares (OLS) regression. The 

study found that Fixed Asset Turnover Ratio has a positive but non-significant effect on Tobin's Q of 

listed oil and gas firms in Nigeria, while Total Asset Turnover Ratio has a negative but non-

significant effect on Tobin's Q of listed oil and gas firms in Nigeria. The study recommends that the 

boards of directors of listed oil and gas firms should prioritize investments in training and 

development for operational staff to ensure optimal utilization of fixed assets. This training can 

enhance asset productivity and support sustainable growth in firm value. 

Keywords: Asset management, Fixed asset turnover ratio, Total asset turnover ratio, and Tobin’s Q 

 

Introduction 

Asset management is not just about financial stewardship; but it also encompasses the strategic 

deployment, maintenance, and utilization of both physical and intangible assets to optimize 

operational performance and achieve long-term business goals (Joseph, Isah & Abe, 2023). As the 

industry faces increasing pressure from stakeholders, including governments, investors, and 

environmental groups, the need for robust asset management practices has become more 

pronounced. Firms that can effectively manage their assets are better positioned to navigate the 

complexities of the industry, mitigate risks, and capitalize on opportunities, thereby enhancing their 

value and ensuring their competitiveness in the global market (Achori, Dada & Ogundajo, 2023). 

Asset management involves a comprehensive approach to managing an organization’s assets 

throughout their lifecycle—from acquisition and operation to maintenance and eventual disposal 

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American Research Journal of Economics, Finance and Management 
Volume 12 Issue 4, October-December 2024 
ISSN: 2836-9416 
Impact Factor: 5.57 
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17 | P a g e  

(Achori, Dada & Ogundajo, 2023). Ensuring asset integrity is crucial in the oil and gas industry, where 

the failure of critical assets can have catastrophic consequences, including environmental disasters, 

financial losses, and damage to a company’s reputation. Value optimization, the ultimate goal of asset 

management, involves maximizing the return on investment from assets while minimizing costs and 

risks. This requires a strategic approach to asset management, where decisions are based on a 

thorough understanding of the asset’s value, its contribution to the organization’s objectives, and the 

trade-offs between cost, risk, and performance. In the oil and gas industry, effective asset 

management is critical to achieving long-term business success because asset management plays a 

pivotal role in influencing the value of firms, particularly in capital-intensive industries like oil and 

gas. The value of a firm is often measured by its market capitalization, which reflects the collective 

perception of investors regarding the firm’s future profitability and growth potential (Igwe, 2024). 

Effective asset management can enhance firm value by improving operational efficiency, reducing 

costs, and mitigating risks, all of which contribute to stronger financial performance and higher 

investor confidence. 

Firms that manage their assets in a manner that maximizes efficiency are able to minimize costs, and 

optimize production, thereby enhancing overall firm value. Asset management practices when 

strategically aligned with the firm’s long-term goals ensures that assets are well-maintained, reliable, 

and capable of delivering consistent performance over time (Nkwo, 2023). Additionally, firms would 

proactively manage risks associated with asset failures, regulatory compliance, and environmental 

impacts, thereby protecting their investments and maintaining a strong reputation among 

stakeholders. 

However, asset management practices are often suboptimal, characterized by inadequate 

maintenance, poor planning, and insufficient investment in new technologies (Campbell, Jardine, 

McGlynn & Barry, 2024). Many firms struggle to maintain the integrity and reliability of their critical 

assets, leading to frequent breakdowns, production disruptions, and increased operational costs. 

Additionally, the risk management strategies employed by these firms are often reactive rather than 

proactive, with firms responding to asset failures and regulatory issues only after they have occurred. 

This approach not only increases the likelihood of operational disruptions but also exposes firms to 

significant financial risks (Joseph, Isah & Abe, 2023). 

The existing literature reveals a significant gap in understanding the effect of asset management on 

firm value, specifically within the context of listed oil and gas firms in Nigeria. Previous studies, such 

as Basri (2023), focused on total asset turnover and asset structure but did not address the industry-

specific dynamics of the oil and gas sector. While Abebe (2022) and Wokeh (2022) explored asset-

liability management and non-current assets, their research did not examine the impact on Tobin’s Q, 

a key measure of firm value. Further, Banamtuan, Zuhroh, and Sihwahjoeni (2020) and Charlie and 

Akpan (2020) assessed asset management’s effect on performance metrics like ROI but overlooked 

Tobin's Q in the context of Nigerian oil and gas firms. Studies by Purba and Bimantara (2020) and 

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American Research Journal of Economics, Finance and Management 
Volume 12 Issue 4, October-December 2024 
ISSN: 2836-9416 
Impact Factor: 5.57 
Journal Homepage: https://americaserial.com/Journals/index.php/ARJEFM, 
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Sarafa and Joshua (2020) investigated asset management effects on financial performance indicators, 

yet did not address its specific impact on Tobin’s Q. Kadioglu and Ocal (2017) and Mwaniki and 

Omagwa (2017) also failed to explore this relationship within the oil and gas sector. Addressing this 

gap could provide crucial hints on how asset management strategies influence firm value in this 

critical industry. The main objective of this study is to examine the effect of asset management on the 

firm value of listed oil and gas firms in Nigeria. The specific objectives are to: 

 Evaluate the effect of fixed asset turnover ratio on Tobin’s Q of listed oil and gas firms in 

Nigeria.  

 Determine the effects of total asset turnover ratio on Tobin’s Q of listed oil and gas firms in 

Nigeria. 

Conceptual Review 

Asset Management 

Asset management is a systematic approach to overseeing a company's assets with the aim of 

enhancing their value and optimizing their use while mitigating associated risks (Joseph, Isah & Abe, 

2023). This process involves the strategic organization, monitoring, and administration of both 

physical and financial assets to ensure they contribute effectively to achieving the company's goals 

and maximizing returns on investment. At its core, asset management seeks to balance the cost of 

owning and maintaining assets against the benefits they deliver (Purba & Bimantara, 2020). Effective 

asset management encompasses a range of activities including inventory management, maintenance 

scheduling, and asset tracking. It requires the careful planning and execution of strategies for 

acquiring, utilizing, and disposing of assets in a manner that aligns with the organization's strategic 

objectives (Oghenekohwo, Anastesia & Moses, 2019). This practice involves managing both tangible 

assets, such as machinery, real estate, and infrastructure, and intangible assets like financial 

investments and intellectual property (Olaoye & Ayodele, 2019).  

A key aspect of asset management is optimizing the return on assets while controlling costs and risks. 

For instance, investing in high-cost equipment may enhance operational efficiency, but organizations 

must also weigh the costs of maintenance and potential repairs throughout the equipment's lifecycle 

(Kadioglu & Ocal, 2017). Effective asset management thus requires a careful evaluation of whether the 

long-term benefits outweigh the associated expenses and risks. Risk management is another crucial 

element of asset management. This involves identifying and addressing potential risks related to asset 

ownership, such as equipment failures, accidents, and technological obsolescence. By implementing 

robust risk management strategies, organizations can reduce the likelihood and impact of such risks, 

thereby protecting their investments and ensuring continuous operational stability (Purba & 

Bimantara, 2020).  

Fixed Asset Turnover Ratio 

The fixed asset turnover ratio is a key financial metric that assesses how efficiently a company utilizes 

its fixed assets to generate revenue. Fixed assets, which include long-term investments such as 

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property, plant, and equipment, are not expected to be converted into cash within a year (Olaoye & 

Ayodele, 2019). This ratio helps evaluate how effectively these assets are leveraged to produce sales. 

To calculate the fixed asset turnover ratio, the company’s net sales over a specific period, usually a 

year, are divided by the average fixed assets held during that same period (Sunjoko & Arilyn, 2016). 

The resulting figure indicates the amount of revenue generated for each dollar of fixed assets. A high 

fixed asset turnover ratio suggests that the company is efficiently using its fixed assets to drive sales, 

reflecting an effective production process and robust asset management practices (Purba & 

Bimantara, 2020). It often implies that the company is making optimal use of its property, plant, and 

equipment, and has a solid strategy for generating revenue. 

Investors and analysts frequently use the fixed asset turnover ratio to gauge a company’s operational 

efficiency and financial health (Mawih, 2013). By comparing this ratio with those of other firms in the 

same industry, stakeholders can gain hints into a company's relative performance. Additionally, 

tracking changes in the ratio over time can provide valuable information about the effectiveness of the 

company's strategies and highlight areas where operational improvements may be needed (Sunjoko & 

Arilyn, 2016). Overall, the fixed asset turnover ratio is a critical measure for understanding how well a 

company is using its fixed assets to generate sales and revenue. It helps in assessing whether the 

company’s investment in property, plant, and equipment is translating into effective sales 

performance and operational efficiency. 

Total Asset Turnover Ratio 

The total asset turnover ratio is a financial metric that assesses how effectively a company utilizes its 

assets to generate revenue. This ratio is calculated by dividing the company’s net sales by its average 

total assets over a specific period, typically one year (Sunjoko & Arilyn, 2016). It serves as a measure 

of the efficiency with which a company converts its assets into sales. This ratio is essential for 

evaluating a company's operational performance because it compares the total revenue generated to 

the total assets employed in the business (Oghenekohwo, Anastesia & Moses, 2019). By analyzing this 

ratio, investors and analysts can gain hints into how well a company is managing its assets to produce 

revenue. A higher total asset turnover ratio indicates that the company is effectively leveraging its 

assets to generate substantial revenue, suggesting efficient resource management and potentially 

higher profitability (Kurniawan, 2021). This efficiency is indicative of a well-run company with 

effective asset utilization strategies. 

Conversely, a lower total asset turnover ratio may signal inefficiencies in asset management. If a 

company is not generating enough revenue relative to its asset base, it could imply that the company 

is not utilizing its assets effectively. This could be due to factors such as excess inventory, 

underperforming assets, or suboptimal resource allocation (Olaoye & Ayodele, 2019). For investors, a 

low ratio might be a cause for concern as it may reflect potential operational issues or decreased 

profitability. 

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Firm Value 

Market capitalization, one of the most commonly used measures, is calculated by multiplying the 

company’s current share price by its total number of outstanding shares. This metric provides a 

snapshot of the company’s market value as perceived by investors, reflecting how much they are 

willing to pay for a share of the company. Market capitalization is a straightforward measure but may 

not fully capture the company’s financial health or growth prospects. Enterprise value offers a more 

comprehensive assessment by including not just the market capitalization but also net debt, which 

accounts for the company's outstanding debt and cash reserves. This metric provides a more holistic 

view of a company's total value, considering its capital structure and financial obligations. Enterprise 

value is often used in valuation multiples, such as the EV/EBITDA ratio, to assess a company's value 

relative to its earnings before interest, taxes, depreciation, and amortization. 

Book value, on the other hand, represents the net asset value of a company, calculated as total assets 

minus total liabilities. While it provides a hint into the company's equity position, it may not fully 

reflect the market value, especially for companies with significant intangible assets or those in rapidly 

changing industries. Firm value is not static; it evolves with changes in the company's financial 

performance, market conditions, and investor perceptions (Shuaibu, Ali & Amin, 2019). Key factors 

influencing firm value include revenue growth, profitability, risk management, and operational 

efficiency. Additionally, external factors such as market trends, economic conditions, and industry 

dynamics play a role in shaping a company's value. By understanding firm value, stakeholders can 

make informed decisions about investments, corporate strategy, and financial management. 

A Tobin’s Q ratio greater than one indicates that the market value of the assets exceeds their 

replacement cost, suggesting that the firm’s assets are valued highly by investors and that it may be 

advantageous to invest in or expand the business. Conversely, a Tobin’s Q ratio less than one implies 

that the market value of the assets is lower than their replacement cost, which could signal 

undervaluation or a less attractive investment opportunity. In this case, it might be more prudent to 

delay or reconsider new investments. Tobin’s Q is a valuable tool for assessing investment decisions 

and corporate strategy (El-Faitouri, 2014). It helps identify whether existing assets are being used 

efficiently and whether new investments will add value (Singh, Tabassum, Darwish & Batsakis, 2018). 

Companies with a high Tobin’s Q are often seen as having strong growth prospects and competitive 

advantages, while those with a low Q may face challenges or require strategic adjustments. This ratio 

also provides hints into how market perceptions and asset valuation impact corporate investment 

decisions and overall firm value. 

Empirical Review 

Rachman, Karyatun and Digdowiseiso (2023) determined the effect of Total Asset Turnover (TATO) 

on Financial Performance of listed firms in Indonesia. This study was processed using the eviews 10 

application. In this study, there were 79 population of Property and Real Estate companies listed on 

the Indonesia Stock Exchange (IDX) for the 2016-2020 period. The sample of this research used 

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American Research Journal of Economics, Finance and Management 
Volume 12 Issue 4, October-December 2024 
ISSN: 2836-9416 
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purposive sampling method. The results of the regression analysis show that partially total Asset 

Turnover (TATO) has a positive and significant impact on the financial performance of property and 

real estate companies listed on the IDX in 2016-2020. Wokeh (2022) ascertained the impact of non-

current assets on financial performance among listed deposit money banks in Nigeria. Using an ex-

post facto design, the study covered all thirteen listed deposit money banks in Nigeria for 2022, 

employing a census approach. Data from the annual reports of these banks from 2017 to 2021 were 

analyzed using multiple regression and Stata12 software. The study showed a negative and 

insignificant relationship between property, plant, and equipment and return on assets, and a positive 

but insignificant relationship between these assets and return on equity. Banamtuan, Zuhroh and 

Sihwahjoeni (2020) determined the effect of Asset Management on stock prices through Return on 

Investments (ROI) in Indonesia. This research is an explanation using quantitative methods. The 

population of the study was 64 companies listed on the Indonesia Stock Exchange. The sampling 

technique used was purposive sampling with the results of 36 companies. The data used coverred 

2016-2018 financial statements. The analysis method applied was path analysis. The results of the 

study proved that Management of asset significantly influences ROI, Management asset significantly 

influences stock prices. Charlie and Akpan (2020) examined the influence of tangible and intangible 

assets ratio on the performance of deposit money banks (DMBs) in Nigeria. Secondary data, were 

collected from published financial statements of ten (10) sampled DMBs from 2000 to2017. The ex-

post facto research design was adopted, and Pooled multiple regression techniques was employed for 

the analysis and test of the hypotheses. Result revealed that the ratio of tangible to the intangible 

asset has a significant negative effect on ROA of DMBs in Nigeria. Cheptoo (2018) determined the 

effect of asset performance management on profitability of deposit taking Saccos in Nakuru County, 

Kenya. The study was guided by four variables; loan performance management, fixed assets 

management, financial investments management, and accounts receivables management. The study 

used explanatory research design, stratified proportional sampling and random sampling technique. 

Primary data was collected using structured questionnaires. Data was analyzed using descriptive 

statistics including, frequencies, mean and standard deviations and inferential statistics methods 

including correlation coefficient and with the assistance of SPSS as the tool of analysis. The research 

findings indicate there exist a significant positive relationship between loan performance, fixed assets 

management, financial investments management, accounts receivables management and profitability 

of deposits taking saccos in Nakuru Town. Kadioglu and Ocal (2017) investigated whether asset 

quality affects the bank’s profitability in Turkey. The study applied a panel regression method to the 

quarterly data set including 1809 observation belongs to 55 Banks in Turkey during the period from 

1st quarter of 2005 to 3rd quarter of 2016. It was found that lower asset quality leads to the lower 

return on equity and return on asset, and higher asset quality leads to the higher return on equity and 

return on asset. Oliver, Ugbor and Chukwuani (2017) ascertained the relationship between assets 

growth rate financial performance of manufacturing firms in Nigeria using six firms from the 

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Nigerian stock exchange and analyzed the firms for a period of ten years using Pearson product 

moment correlation matrix and multiple regressions. The findings showed that non-current asset 

growth rate and net asset growth rate of firms are positively and strongly related. It was 

recommended that manufacturing firms in Nigeria should increase their non-current assets and net 

assets value by increasing their total assets and reducing the components of their current liabilities. 

Martina (2015) examined the association between tangible assets and the capital structure of Croatian 

small and medium-sized enterprises. The study was conducted on a sample of 500 Croatian SMEs for 

the period between 2005 and 2010. The data used for the empirical analysis were taken from 

companies’ annual reports. The results of the regression analysis found that tangible assets are 

differently correlated with short-term and long-term leverage. The relationship between tangible 

assets and short-term leverage was negative and statistically significant in all observed years. The 

relationship between tangible assets and long-term leverage was positive in all observed years and 

statistically significant. The results showed that small and medium-sized companies use their 

collateral to attract long-term debt, which means that small and medium-sized companies use lower 

costs and the interest rate of long-term debt in relation to short-term debt. Mawih (2013) investigated 

the effects of assets structure (fixed assets and current assets) on the financial performance of some 

manufacturing companies listed on Muscat Securities Market (MSM), for the period 2008-2012. The 

assets structure was measured by fixed assets turnover and current assets turnover while the financial 

performance was measured by ROA and ROE. The overall result of the study was that the structure of 

assets does not have a strong impact on profitability in terms of ROE. Another result of the study 

indicated that only the fixed assets had impact on ROE unlike ROA. Further, the result suggested that 

the effect of asset structure had an impact on ROE only in petro-chemical sector. It also concluded 

that there was no impact for current assets on ROE and ROA. 

Methodology 

The ex-post facto design was adopted in examining the effect of asset management on the firm value 

of listed oil and gas firms in Nigeria because it allows for the analysis of existing data to identify 

relationships between variables after events have occurred.  

The study examines all publicly listed Oil and Gas firms on the Nigerian Exchange Group (NGX). As 

of December 31, 2023, there are nine Oil and Gas companies on the NSE. 

The sample for this study was determined through purposive sampling, selecting five out of the nine 

available firms based on data accessibility. The annual reports and financial statements of these five 

oil and gas companies, covering the period from 2014 to 2023, were used for variable computation 

and analysis. The firms chosen for the study are; Total Energies PLC, Conoil PLC, Eterna PLC, Japaul 

Oil & Ventures PLC, MRS Oil Nigeria PLC. 

Method of Data Collection 

The data collection method for this study involved the use of annual reports from the selected oil and 

gas firms spanning the financial years from 2014 to 2023. This approach ensured that the data were 

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comprehensive and relevant for the analysis of asset management's impact on firm value. By relying 

solely on these reports, the study was able to obtain detailed and consistent financial information 

necessary for examining the relationships between asset management practices and firm value 

metrics. 

Model Specification  
The model tested in the study is shown below.  
TOQit = β0 + β1FITRit + β2TOTRit + ε………………………………………..i 
Where: 
TOQ = Tobin’s Q 
FITR = Fixed Asset Turnover Ratio 
TOTR = Total Asset Turnover Ratio 
ε = Error term 
βo = Regression intercept 
β1-2 = Parameters 
Method of Data Analysis 
Data were gathered and input into E-View 10.0 software for the computation of both independent and 
dependent variables. The analysis was conducted using descriptive statistics and ordinary least 
squares (OLS) regression. The estimates obtained from the OLS regression served as the foundation 
and tool for hypothesis testing. 
Decision Rule 
The decision rule in this study provides the criteria for accepting or rejecting the null hypothesis. The 
criterion is based on a 5% level of significance, which means that if the p-value in the result is greater 
than 0.05, the null hypothesis will be accepted. In opposition, if the p-value is less than 0.05, the null 
hypothesis will be rejected and the alternative hypothesis will be accepted. 
Data Analysis and Results 
Table 1 Descriptive Analysis 
 TOQ FITR TOTR 

 Mean  1.070704  17.83480  1.893302 

 Median  0.898076  9.053035  1.752859 

 Maximum  2.984020  128.9230  8.098671 

 Minimum  0.628096  0.011631  0.003187 

 Std. Dev.  0.440060  24.83891  1.457359 

 Skewness  2.227935  2.612736  1.591877 

 Kurtosis  9.233313  10.66700  8.048009 

 Jarque-Bera  122.3103  179.3510  74.20560 

 Probability  0.000000  0.000000  0.000000 

 Sum  53.53522  891.7401  94.66508 

 Sum Sq. Dev.  9.488996  30231.59  104.0709 

 Observations  50  50  50 

Source: E-views 10.0 Analytical Result (2024) 

 

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The analysis of Tobin's Q (TOQ) indicates a mean value of 1.0707, suggesting that, on average, the 

market values of listed oil and gas firms in Nigeria exceed their asset values, reflecting positive 

investor sentiment. The maximum value of 2.9840 highlights instances where the market 

capitalization significantly outstrips the firm's asset base, potentially indicating high growth 

expectations or market confidence. Conversely, the minimum value of 0.6281 indicates some firms 

are valued below their asset values, possibly due to negative perceptions or performance issues. The 

standard deviation of 0.4401 reveals moderate variability around the mean, suggesting differences in 

firm valuations across the industry. The skewness of 2.2279 points to a rightward skew in the 

distribution, indicating that a few firms have very high market valuations. Lastly, the kurtosis of 

9.2333 indicates a leptokurtic distribution, suggesting a higher likelihood of extreme values in the 

dataset, and the probability of the Jarque-Bera statistic at 0.0000 confirms that the TOQ data is 

significantly non-normally distributed. 

For the Fixed Asset Turnover Ratio (FITR), the mean of 17.8348 indicates a strong capacity of the 

firms to generate revenue from their fixed assets, averaging about 17.83 units of revenue per unit of 

fixed assets. The maximum value of 128.9230 suggests that certain firms exhibit exceptional efficiency 

in utilizing their fixed assets to generate revenue, while the minimum of 0.0116 points to severe 

inefficiencies in some firms. The standard deviation of 24.8389 reflects considerable variability in 

how effectively different firms manage their fixed assets, indicating diverse operational practices 

across the sector. The skewness of 2.6127 indicates a significant rightward skew, suggesting that a few 

firms significantly outperform their peers in terms of fixed asset turnover. The kurtosis of 10.6670 

indicates a distribution with heavier tails, suggesting a greater likelihood of extreme values than in a 

normal distribution. The Jarque-Bera test shows a probability of 0.0000, confirming that the FITR 

data is significantly non-normally distributed. 

Lastly, the Total Asset Turnover Ratio (TOTR) presents a mean of 1.8933, indicating that, on average, 

the firms generate about 1.89 units of revenue for every unit of total assets, reflecting a relatively 

efficient use of total assets. The maximum value of 8.0987 highlights instances of particularly 

effective asset utilization; while the minimum value of 0.0032 shows that some firms struggle 

significantly to generate revenue from their assets. The standard deviation of 1.4574 indicates 

moderate variability in asset turnover performance across the firms. The skewness of 1.5919 suggests 

a rightward skew in the distribution, indicating that a few firms achieve high turnover ratios. The 

kurtosis of 8.0480 indicates a distribution that is peaked, suggesting a concentration of values around 

the mean with potential outliers. The Jarque-Bera probability of 0.0000 confirms that the TOTR data 

is significantly non-normally distributed, indicating that traditional parametric analyses may need to 

be approached with caution. 

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Test of Hypotheses 

Table 2: Regression Result from OLS Model 
Dependent Variable: TOQ   

Method: Least Squares   

Date: 09/23/24   Time: 04:29   

Sample: 1 50    

Included observations: 50   

     
     Variable Coefficient Std. Error t-Statistic Prob.   

     
     FITR 0.000762 0.003222 0.236589 0.8140 

TOTR -0.222383 0.229586 -0.968628 0.3378 

C 1.237748 0.105330 11.75110 0.0000 

     
     R-squared 0.081266     Mean dependent var 1.070704 

Adjusted R-squared 0.021348     S.D. dependent var 0.440060 

S.E. of regression 0.435338     Akaike info criterion 1.251229 

Sum squared resid 8.717867     Schwarz criterion 1.404190 

Log likelihood -27.28072     Hannan-Quinn criter. 1.309477 

F-statistic 1.356293     Durbin-Watson stat 1.414739 

Prob(F-statistic) 0.267952    

     
     
Source: Eviews 10.0 Analytical Result (2024) 

The regression analysis presented in Table 4.3 examines the effect of asset management on the firm 

value of listed oil and gas firms in Nigeria, as measured by Tobin’s Q (TOQ). The adjusted R-squared 

value of 0.0213 suggests that only about 2.13% of the variability in TOQ is explained by the 

independent variables in the model, indicating that the model may not adequately capture the factors 

influencing firm value. Additionally, the F-statistic probability of 0.2679 implies that the overall 

model is not statistically significant, suggesting that the included predictors do not collectively have a 

meaningful effect on the firm value measured by Tobin’s Q. 

Test of Hypothesis One 

H01: Fixed asset turnover ratio does not significantly affect the Tobin’s Q of listed oil and gas firms in 

Nigeria. 

The Fixed Asset Turnover Ratio (FITR) presents a coefficient of 0.000762 and a p-value of 0.8140, 

revealing a positive and again statistically insignificant effect on Tobin's Q. This result implies that an 

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increase in the fixed asset turnover ratio contributes a marginal increase of 0.000762 to Tobin’s Q, 

but with a p-value far exceeding 0.05, the effect is not statistically significant. Consequently, we also 

accept the null hypothesis for FITR, indicating that the efficiency in utilizing fixed assets does not 

significantly influence the firm value in the oil and gas sector. Thus, Fixed Asset Turnover Ratio has a 

positive but non-significant effect on Tobin's Q of listed oil and gas firms in Nigeria (Beta: 0.000762, 

p = 0.8140). 

Test of Hypothesis Two 

H02: Total asset turnover ratio does not significantly affect the Tobin’s Q of listed oil and gas firms in 

Nigeria. 

Lastly, the Total Asset Turnover Ratio (TOTR) has a coefficient of -0.222383 with a p-value of 0.3378, 

suggesting a negative relationship with Tobin’s Q, though this too is statistically insignificant. This 

coefficient indicates that a one-unit increase in total asset turnover could lead to a decrease in Tobin's 

Q by approximately 0.2224, yet with a p-value greater than 0.05, we cannot reject the null hypothesis. 

Thus, this result implies that the overall effectiveness in utilizing total assets does not significantly 

affect the firm value, further reinforcing the notion that asset management practices in this context 

may not be aligned with enhancing market valuation. Thus, Total Asset Turnover Ratio has a negative 

but nonsignificant effect on Tobin's Q of listed oil and gas firms in Nigeria (Beta: -0.222383, p = 

0.3378). 

Conclusion and Recommendations 

Conclusion 

Firms that manage their assets in a manner that maximizes efficiency are able to minimize costs, and 

optimize production, thereby enhancing overall firm value. Asset management practices when 

strategically aligned with the firm’s long-term goals ensures that assets are well-maintained, reliable, 

and capable of delivering consistent performance over time. Additionally, firms would proactively 

manage risks associated with asset failures, regulatory compliance, and environmental impacts, 

thereby protecting their investments and maintaining a strong reputation among stakeholders. The 

findings of the study suggests that an increase in the current asset turnover ratio is associated with a 

higher Tobin’s Q, indicating that firms are able to generate more revenue from their current assets. 

This could be reflective of efficient management practices and operational agility in utilizing short-

term assets to drive sales. Also, firms generating revenue effectively from their fixed assets can 

contribute to their overall market value. In the capital-intensive oil and gas industry, where 

significant investments in infrastructure and equipment are necessary, effective utilization of fixed 

assets can signal operational efficiency.  

Finally, while some firms achieve high total asset turnover, they might do so at the expense of profit 

margins, leading to lower market valuations. In the oil and gas sector, a high turnover could be 

misleading if it does not translate into profitability or if it is indicative of aggressive revenue 

generation tactics that compromise asset quality. Such dynamics might cause investors to reassess the 

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sustainability of growth generated from asset turnover alone, focusing instead on overall financial 

health and long-term viability. The negative coefficient prompts consideration of broader strategic 

factors and operational effectiveness beyond asset management practices. In conclusion, effective 

asset utilization must be complemented by robust profitability and strategic positioning to drive 

investor confidence and enhance market valuation. 

Recommendations 

 The boards of directors of listed oil and gas firms should prioritize investments in training and 

development for operational staff to ensure optimal utilization of fixed assets. This training can 

enhance asset productivity and support sustainable growth in firm value. 

 Investors and financial analysts should consider a more comprehensive evaluation framework 

that includes not only total asset turnover but also profitability margins and long-term strategic 

positioning. This holistic approach can lead to more accurate assessments of firm value in the oil and 

gas sector. 

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