Outright Cash Purchase of Capital Assets and Enterprise Profitability in Nigeria: A Reflection on the Construction Industry

Abstract

This paper examines the influence of capital assets acquired outrightly by cash on enterprise profitability from the perspective of construction companies. Data were obtained by means of questionnaire. Analyses were performed using descriptive statistics and Pearson’s product moment coefficient of correlation. Results of descriptive statistics indicate 61.11% preference for acquisition of capital assets by outright cash purchase. Correlation analysis reveals a statistically significant moderate positive relationship between capital assets acquired out rightly through cash payment and net profit. Own capital assets acquired by outright cash purchase improves net profit performance of construction companies. Companies in the construction sector should aim at investing in capital assets through outright cash purchase instead of hiring or leasing.