Competitor accounting involves exploring markets, formulating strategies, and establishing market patterns for sustained industry leadership. This study examined the effect of competitor cost assessment (component of competitor accounting) on the profitability (net profit margin and return on equity) of quoted manufacturing firms in Nigeria. An ex-post facto design was adopted, with a sample of 92 out of 120 firms, drawn using TaroYamene formula and random numbers table. Financial data of the firms for the period 2012-2016, published in the Nigerian Stock Exchange Fact Book, were collected and analysed using descriptive and inferential tools; aided by Statistical Package for Social Sciences (SPSS) version 22. The results revealed that competitor cost assessment significantly affects the net profit margin (firm average index = 19.63% > industry average of 5%) and the return on equity (firm average index = 20.02% > industry average of 5%). The inferential statistics are significant at 95% confidence level (D-W = 2.299, R2= 0.42, p-value = 0.00 < 0.05). The study, therefore, concludes that competitor cost assessment significantly affects the profitability of quoted manufacturing companies in Nigeria. Based on this conclusion, it is recommended that managers of the firms should ensure efficient competitor cost analysis for sustained cost leadership and enhanced financial performance. Also, a special unit anchored by professionals in the accounts and marketing departments of the firms should be charged with the responsibility of conducting continuous competitor accounting assessment, in line with financial reporting best practices, to strategically promote business growth and keep pace with trends in the industry.
Keywords: Business Profitability, competitor cost accounting, quoted manufacturing firms.
