Financial Performance of Wood Marketing and Family Agroforest Business in Delta State, Nigeria

Abstract

The Nigerian forestry sector plays a significant role in rural development. This study focused on the evaluation of the financial performance of wood marketing and its effect on the survival of family agroforest business in Delta State. Both multistage and purposive sampling techniques were used to draw samples from the different wood markets in the State capital with the aid of structured questionnaires. Mean age of wood marketers was 51years, majority were males (90%), with average household size of 7 persons and only 30 per cent had a tertiary education. Budgetary analysis showed that wood marketing is profitable, with an annual net profit of ₦879,026.80, a Rate of Return on Investment, RORI of 42.9 per cent and a current ratio of 2.9 indicating liquidity. The R2 of 0.537 (54%) shows that the financial performance indicators were able to predict the survival of family wood business by 54% with rate of return on investment (β = 0.610; p<0.01) and net profit (β = 0.822; p<0.01) positive and statistically significant at 1% probability level. The study revealed that the cost of energy and power was the most serious constraint faced by wood marketers in the study area. Wood marketing in the study area was found to be profitable and the key financial performance indicators that impacted survival were rate of return on investment and net profit. This translates to a positive impact on the livelihood of families engaged in the business.