Firm Characteristics And Financial Performance: Evidence From Nigeria’S Listed Consumer Goods Sector
Nangih, Efeeloo Ph.D, FCA, FCTI
Department of Accountancy, Kensarowiwa Polytechnic, Bori.
Turakpe, M.J Ph.D
Department of Banking & Finance, Kensarowiwa Polytechnic, Bori
Effe-Nnamdi Ann C.
Department of Banking & Finance, Abia State University, Uturu
Keywords: Firm Characteristics, Financial Performance, Firm Age, Firm Size, Earnings Per Share, Return on Assets
Abstract
The study examined the effect of firm characteristics on financial performance of listed companies. The study population was listed consumer goods firms in Nigeria. The study adopted the ex post facto design and was anchored on the Dynamic capability theory. It employed purposive sampling technique to select a total of 16 companies; which served as sample for the study. Data were sourced from annual financial reports of the sampled firms from 2013 to 2022 and analyzed using descriptive, correlation and panel regression techniques. The findings showed that firm age had a negative, though insignificant effect on EPS. Relatedly, firm age was also found to have a significant negative effect on the ROA of the consumer goods firms. In contrast, firm size (FSIZ) was found to have a positive and significant effect on EPS. Lastly, it was found that FSIZ has a significant negative effect on the return on assets of consumer goods firms in Nigeria. Based on the findings, the study recommended that; firstly, consumer goods firms should not consider firm age as important since it had insignificant effect on EPS. Secondly, since firms age matter when it as to with increase in profitability (return on assets). Thirdly, it was recommended that managers of consumer goods firms should know that as the age of the firms increases, the more the profitability, since it had significant positive effect on ROA. Finally, the study recommended that managers of consumers should increase their firm size, since it contributed significantly to both measures of financial performance.