Chapter One — 1.1 Background to the Study

Zero-Based Budgeting has increasingly attracted the attention of researchers, regulators, and practitioners concerned with profitability of listed firms. This growing interest reflects the recognition that zero-based budgeting does not operate in isolation, but interacts with a wider set of institutional and market conditions found within Selected States in South-West Nigeria.

Within the context of Selected States in South-West Nigeria, this relationship carries particular significance. Organizations in this setting operate under a distinct combination of economic, regulatory, and market conditions that may amplify or dampen the effect of zero-based budgeting on profitability of listed firms, making a context-specific inquiry both timely and necessary.

1.2 Statement of the Problem

Despite a growing body of literature on zero-based budgeting, there remains limited consensus on the precise nature of its relationship with profitability of listed firms, particularly within Selected States in South-West Nigeria. Many organizations continue to make decisions about zero-based budgeting without a clear, evidence-based understanding of how those decisions ultimately affect profitability of listed firms. This gap between practice and empirical understanding is the central problem this study seeks to address.

1.3 Objectives of the Study

1. To examine the effect of Zero-Based Budgeting on profitability of listed firms in Selected States in South-West Nigeria.
2. To assess the extent to which zero-based budgeting influences profitability of listed firms within the study area.
3. To identify the challenges associated with zero-based budgeting in relation to profitability of listed firms.
4. To recommend strategies for optimizing zero-based budgeting in order to improve profitability of listed firms.

1.4 Research Questions

1. What is the effect of zero-based budgeting on profitability of listed firms in Selected States in South-West Nigeria?
2. To what extent does zero-based budgeting influence profitability of listed firms within the study area?
3. What challenges are associated with zero-based budgeting in relation to profitability of listed firms?
4. What strategies can be adopted to optimize zero-based budgeting in order to improve profitability of listed firms?

1.5 Significance of the Study

Beyond its academic contribution to the field of accounting, this study has practical value for management teams within Selected States in South-West Nigeria seeking to understand how zero-based budgeting translates into measurable outcomes around profitability of listed firms. It is equally useful to students and future researchers looking for a localized empirical reference on this relationship.

1.6 Scope of the Study

In terms of scope, this study confines itself to Selected States in South-West Nigeria, focusing specifically on how zero-based budgeting relates to profitability of listed firms within that setting. Findings are interpreted within these boundaries rather than as universal claims applicable to every organization or market.