Asset Tangibility and Financial Performance of Non-Financial Firms Listed on the Nairobi Securities Exchange

Purpose: This article examines the effect of asset tangibility on the financial performance of non-financial firms listed on the Nairobi Securities Exchange. Design/Methodology/Approach: The study utilised secondary panel data for 34 listed non-financial companies from 2014 to 2023, which were audited. Descriptive statistics, diagnostic tests, correlation analysis, and fixed-effect regressions were used to analyse asset tangibility and financial performance based on return on assets. Findings: There was a negative correlation between asset tangibility and financial performance and a significant negative coefficient in the adjusted fixed-effects model. The bivariate model was negative and not significant, meaning that the impact is more apparent once the liquidity, leverage, and efficiency of operation factors are taken into account. Implications/Originality/Value: The study demonstrates that investing in tangible assets is not assured to enhance profitability in listed non-financial firms. Managers need to enhance the use of assets and not tie up capital in poorly performing assets.