January 29, 2022


Accounting + Finance Blog

Meaning of Large Business and Key Explanations

Meaning of Large Business and Key Explanations

Businesses are sources of jobs for individuals and families. It is also a means to solve problems rampaging the world. Large business in particular is on a larger scale solving certain human needs. Google, Amazon, Dangote Cement, Access Bank are among the large firms in the world and Africa solving humans pertinent needs. How is this defined in Nigeria?

Definition of Large Business

It is defined as a type of business with an employee base of at least 301 persons, NGN 10 million in assets and a turnover of above NGN 10 million. It can also be defined as any entity who has their shares listed in the Nigerian or other stock exchange markets. However, not all large entities are listed in a stock exchange market.

Key Explanations

Type of business. I have already discussed other types of business classified base of size. As well as the number of persons that formed it. Large business is one of such. However, it will take a camel to see through a needle eye than to see large businesses owned and runned by a single person.

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Number of staff. In Nigeria, the number of staff of a big entity should be a minimum of 301 employees. There is no maximum number to this. Dangote Cement has a total of 16,199 staff excluding directors. According to 2020 financial reports made available on the Nigeria Exchange Group website.

Asset base. The asset base for a large entity is a minimum of 10 million Naira. Some big businesses have acquired assets more than the stated minimum. In Dangote’s case, its total assets are currently NGN 2.022 Trillion.

Turnover. The minimum turnover or revenue for big firms in Nigeria is 10 million Naira. For our example, that is, Dangote’s revenue for 2020 is stated as 1.034 Trillion Naira. This is enough to sponsor a portion of Nigeria’s budget.

Stock Exchange. Most large businesses have their shares listed or quoted in a recognized stock exchange market. Dangote Cement is quoted in the Nigerian Stock Exchange (NSE) market. Therefore, they are referred to as public limited liability companies. However, not all big firms are quoted in a stock exchange. Entities that are below 10 years cannot be listed in the NSE.

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In final note, large with asset base and turnover of above 10 million Naira are large businesses. Also, if the entity holds a workforce of 301 and above, it is referred to as a big entity. Most of them in Nigeria are listed in the Nigerian Stock Exchange market and are providing solutions to the needs of individuals and families while making huge profits.