Effect of Firm Characteristics on Financial Performance Of Listed Food and Beverage Companies in Nigeria

Abstract

This study examines the influence of firm characteristics - specifically, firm age, size, leverage, and liquidity - on the financial performance of listed food and beverage companies in Nigeria from 2008 to 2017. Using an ex post facto research design and panel data regression analysis on data collected from 14 firms listed on the Nigerian Stock Exchange, the study examined how these organisational attributes influence Return on Assets (ROA). Results reveal that the model explains 33.53% (R² = 0.3353) of the variation in financial performance, with firm size (β = 2.4884, p < 0.0001) and liquidity (β = 6.0807, p = 0.0204) showing significant positive relationships with ROA. In contrast, leverage (β = -0.1359, p < 0.0001) demonstrated a significant negative impact, and firm age (β = -0.0465, p = 0.4288) showed no significant influence. The study concludes that internal firm characteristics play a crucial role in determining the financial performance of Nigerian food and beverage companies. It recommends that management should prioritise efficient asset utilisation, implement strategic growth initiatives, exercise caution in capital structure decisions by favouring equity over debt financing, and enhance liquidity management to improve financial outcomes.