Effect Of Deprecation Methods On The Financial Performance Of Manufacturing Companies In Abia State (A Study Of Pz Nig. Plc Aba)

ABSTRACT

This study focuses on the depreciation methods used by FZ Nig Plc Aba, Abia State. This was aimed to determine the extent to which depreciation methods affect the financial performance of manufacturing companies Nigeria. The means of apportioning cost to fixed assets and that depreciation helps in recovering the cost of assets at the end of their useful lives. Journals, books and annual financial reports were used in collection of the secondary data; simple percentages were used in the analysis of the data where as analysis of variance (ANOVA) technique was used to test the hypothesis. Findings made after the analysis of the data was that the study revealed that estimated coefficient of the regression parameter have a positive of sign and thus conform to our prior expectation. The implication of this finding is that the dependent variables profit after tax is negatively affected by the straight line method of depreciation and reducing balance method of depreciation (straight line method); it was however recommended that companies should try to use other different suitable methods of depreciation of fixed assets.