Journal of Theoretical & Applied Statistics 3 (2): 22-30, 2013 ISSN 2079-2174 © IDOSI Publications, 2013 DOI: 10.5829/idosi.jtas.2013.3.2.1206 Corresponding Author: Ubesie Madubuko Cyril, Department of Accountancy, Enugu State University of Science and Technology, Nigeria. 22 Evaluation of the Effect of Non-Current Assets on Return on Assets of Cement Manufacturing Industry in Nigeria Ubesie Madubuko Cyril and E. Eunice Ogbonna Department of Accountancy, Enugu State University of Science and Technology, Nigeria Abstract: The study is on evaluation of the effect of investment on non-current assets on return on asset of cement manufacturing industry in Nigeria. The major aim of the study is to ascertain the effects of non-current assets on the return on assets of cement manufacturing industry in Nigeria. The period covered 2004-2013. The independent variables are Land and Buildings, Plant and Machinery, Motor Vehicles, Furniture and Fittings, while the dependent variable is Return on Asset. Annual accounts and reports were used for analysis and multiple regressions were used to validate the hypotheses. The findings show that there is effect of non- current assets on return on asset but is not significant in Nigeria. It also showed that the independent variable Plant and Machinery contributed more to Return on Asset but not significant. The recommendations include that there should be more investment in non-current asset especially plant and machinery in order to increase the return on asset of cement manufacturing industry in Nigeria. It is also recommended that firms in Nigeria should invest keenly in motor vehicles to ease the problem inherent in distribution of cement product in Nigeria. Key words: Mon-current Assets Lands Buildings Cement manufacturing Industry and Nigeria INTRODUCTION more efficient management is in utilizing its asset Return on Assets is one of the measures of financial noncurrent assets varies greatly among companies. performance. And financial performance measure is one of Capital intensive businesses (with a large investment the important performance measures for economic units in noncurrent assets) are going to be more asset heavy [1]. Financial performance measures are used as the than technology or service businesses. The capital indicators to evaluate the success of economic units in intensive businesses with a large investment in achieving stated strategies, objectives and critical noncurrent asset will have smaller ROA than non-capital success factors [2]. intensive businesses (with a small investment in When cash flow is tight, most owners focus on noncurrent assets) because of a low denominator managing their current asset by cutting inventory and number [5]. It is precisely because businesses collecting money owed them by customers; however, the require different sized asset bases that investors average business has as much capital tied up in need to think how they use the ROA ratio [6]. It is noncurrent asset-the property, plant and equipment used in the light of the above that the effect of noncurrent to create the goods and services to sell [3]. How well the asset on ROA of cement manufacturing company is capital intensive utilizes their asset determines the important. difference between profit and loss. If the property, plant The manufacturing companies dependence on and equipment assets are idle or not generating enough the structure of assets consist of two types of assets, cash flow, this may impact on the value and financial non-current and current assets. The manufacturing health of the business [4]. companies use noncurrent assets to transfer the raw Return on Assets (ROA) ratio illustrates how well materials into finished goods [7]. These assets are called management is employing the company’s noncurrent property; plant and equipment, land, building, assets to make profit. The higher the return, the equipments, automobiles and furniture [8]. base. The need for investment in current and