Effect of Income Determination, and Recognition on Financial Performance of Profit-Making Organizations in Nigeria with Focus on MSME

With a focus on MSMEs in Lagos State, Nigeria, this research investigates the impact of income determination and recognition on the financial performance of profit-making organizations in Nigeria. The dual-process hypothesis served as the study’s foundation. From a sample of 390 respondents gathered via a well-structured questionnaire, the researcher employed both primary and secondary sources. Basic percentages and descriptive statistics like frequency were used to analyze the data acquired and basic linear regression analysis was used to assess the link between the model’s components. The regression analysis’s findings show that the third hypothesis was tested at 5% level of significance using the probability value of the regression analysis, and the p-value (0.002) was less than the threshold. This indicates that the alternative hypothesis was accepted and the null hypothesis was rejected. The statistical significance of this finding is 0.002 = 0.05. The second hypothesis, which examined the connection between MSMEs’ income determination and their financial performance, yielded a 0.758 correlation value and was rejected along with the null hypothesis because the p-value (0.000) was less than the significance level. The research came to the conclusion that higher levels of education and artisan work increase employment and improve the performance of MSMEs in Lagos, Nigeria. It was suggested, among other things, that MSMEs should get training, that credit sales should include interest, and that financing resource purchases should be avoided. Finally, the government should seek to improve the business climate in Nigeria for international firms and potential company owners so that the number of MSME in Lagos State and Nigeria as a whole will rise.