AN ANALYSIS OF THE INFLUENCE OF FIRM SPECIFIC VARIABLES ON FINANCIAL PERFORMANCE IN THE NIGERIAN MANUFACTURING SECTOR

Khafilat Temitope Olayiwola(1),


(1) Department of Accounting and Finance, Faculty of Management Sciences Ajayi Crowther University, Oyo
Corresponding Author

Abstract


This study examined the effects of firm specific variables on firm financial performance in the Nigerian Manufacturing Sector. Ex-post facto research design and secondary data were utilized for the study. Data were sourced from Annual Reports of twenty (20) manufacturing companies from 2008 to 2017. The variables utilized were Sales Growth (SG), Age of the Firm (AF), Tangibility (TAN), Firm Size (FS), and Leverage (LEV) for firm specific variables. Firm performance was measured by Return on Assets (ROA). Pooled Ordinary Least Square (POLS) regression analysis was employed to ascertain the effects of SG, AF, TAN, FS and LEV on ROA at 0.05 level of significance. Findings showed that SG (β = 1.1251, p-value =

0.0013), AF (β = 2.4561, p-value = 0.0045), TAN (β = 0.5602, p-value = 0.0141), FS (β = 0.0308, p-value = 0.0057) and LEV (β = 5.3111, p-value = 0.0353) had positive significant influence on ROA with R2 of the model = 0.7411, adjusted R2 = 0.6816 and p-value = 0.0003. It was concluded that firm specific variables exerted significance influence on the financial performance of the sampled companies and recommended that companies should develop policies aimed at promoting and improving firm characteristics.  


Keywords


Financial Performance, Leverage, Manufacturing Sector, Sales Growth, Tangibility

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