LEAN ACCOUNTING PRACTICES AND FINANCIAL PERFORMANCE OF LISTED SERVICE COMPANIES IN NIGERIA

Abstract

The research problem of this paper investigated the relationship between lean accounting practices and financial performance of listed service companies in Nigeria. Lean accounting practices were disintegrated into cash conversion cycle and Kazien costing while financial performance was measured using return on asset. The study adopted ex post facto research design in exploring the link between lean accounting practices and financial performance of listed service companies in Nigeria. The study used secondary data assembled from the annual reports of the companies under investigation for the period of twelve (12) years from 2013 to 2024. The data were analyzed using panel least squares regression technique. This was conducted with the aid of the E-view 10.0 software and Excel package. Findings from the study revealed that cash conversion cycle has a negative and significant relationship with financial performance while kaizen costing has a positive and significant relationship with financial performance of listed service companies in Nigeria. Thus, the study concluded that cash conversion cycle and kaizen costing are good predictors of financial performance of listed service companies in Nigeria. Based on these findings, this study recommends that companies should re-evaluate and re-investigate the specific aspects of cash conversion cycle that might be contributing to such negative effects and recognize possible drawbacks associated with cash conversion cycle, discover other cash management policies that might be more operational in enhancing financial performance, and perform industry-specific investigation to determine if the adverse impacts hold across diverse companies. Companies should also focus on the implementation of kaizen costing system to ensure uninterrupted progress as well as cost decline plans so as to maintain better financial performance.