Published Paper


Effect of Project Cost Factors on the Financial Performance of Selected Construction Companies in North Central Nigeria

Abani Joseph Alu & Dr. Frank Alaba Ogedengbe
Department of Business Administration, Faculty of Management Sciences, Nile University of Nigeria, Abuja
Page: 704-736
Published on: 2024 June

Abstract

The overarching need for the project costs to be controlled to a tolerable, minimum and acceptable level cannot waver as it has attendant consequences on the outcomes of construction projects. This study investigates the impact of Project Cost Control (PCC), evaluate the impact of Cost Variance Analysis (CVA) and assess the impact of Earned Value Analysis (EVA) on the Return on Assets (ROA) and Return on Equity (ROE) of selected construction companies in North Central Nigeria. 102 semi-structured questionnaires were distributed to the construction professionals in the considered construction firms in North-Central Nigeria of which all were properly filled and returned representing a response rate of 100 percent. The analytical method employed includes descriptive of mean and frequency while the inferential statistics of multi variate linear regression analysis was equally adopted. The results show that there is a significance level for the relationship between PCC and return on asset and return on equity which are 0.021 and 0.032 respectively. For the CVA, multivariate regression analysis has shown that the CVA is statistically significant in relation to the return on asset (0.024) and return on equity (0.037) of the selected construction companies in North Central Nigeria. For EVA, the multivariate regression indicates that earned value analysis is statistically significant in relation to return on asset (0.042) and return on equity (0.013). This study thus, concluded that there has been a significant impact of project cost control, cost variance analysis and earned value analysis on the construction project performances of the selected construction organizations in the North-Central region of Nigeria. This study recommended the need for the construction organizations to ascertain the factors contributing to the cost changes. These factors encompass unexpected occurrences, alterations in the project's extent, inaccurate predictions, or insufficient preparation of which identifying their fundamental causes assists the organizations in formulating a strategic plan to effectively tackle them.

 

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