According to many research on structural factors and financial reporting quality, firm size has a link that is favorably strong and substantial with the financial reporting quality of publicly traded manufacturing enterprises (Hossain, Momin & Leo, 2012; Ahmed, 2012; Mensah & Deajeon, 2013; & Asegdew, 2016). Firm characteristics, firm size, and leverage were found to be significant by Egbunike and Okerekeoti (2018), however Olowokure et al. (2015) found no significant relationship between business size, leverage, and financial reporting quality.

Academic literature often addresses the subject of a firm’s financial performance and the variables that affect it. To gauge the impact these factors have on a company’s financial success, several characteristics of the company have been connected to it. It is used to get a knowledge of the kind of elements that might affect a firm’s financial performance and to what degree. The phrase “ecosystem” refers to a group of people who work in the construction industry (Nikolaus, 2015). On the one hand, research like Hu and Izumida’s (2008) causal analysis of ownership concentration and corporate performance concentrate on the impact of corporate governance factors on performance. Other research focused on capital structure, specifically on leverage and its link to performance.

The research by Vithessonthi and Tongurai (2015), which compares the impact of leverage on performance in domestically and globally focused enterprises, is an example of such a study. The phrase “ecosystem” refers to a group of people who work in the construction industry.

One of the major businesses in the world, the consumer goods industry, is now dealing with a number of difficulties. The Nigerian manufacturing sector, a part of the Consumer Goods industry, had a disastrous year in 2016 as a result of the difficulties that producers encountered (Agency report, 2017). Operators said that the industry encountered a wide range of difficulties, including a shortage of raw materials, a shortfall in infrastructure, expensive banking fees, and a lack of foreign currency.

The fact that more than half of the businesses that survived the widespread shut down were deemed to be in poor condition put the existence of the manufacturing industry in danger. The inadequate power supply, lousy roads, high interest rate, and high cost of energy had a negative impact on every aspect of company, which increased the cost of manufacturing (Agency report, 2017). This has had a major negative impact on the companies’ liquidity as well as the economy’s overall inflation rate. Another significant issue was the severe lack of foreign currency, which made it difficult for businesses to import raw materials for manufacturing and negatively impacted the companies’ liquidity.

Another manufacturing operator bemoaned the approximately N500 billion foreign currency rate loss that was recorded in their account and that resulted in plant closure, unemployment (which had an impact on the GDP of the economy), and lost investment (which also affected the size of the investment contributed in the company, thereby distorting firm size). He said that the exchange rate losses necessitated the injection of working capital to cover the cash discrepancies between N320 and N197 (Agency report, 2017). The difficulty of manufacturers to get foreign currency via the interbank market, according to the managing director of May and Baker, had an impact on industrial output and increased inflation.

Due to the same issue, local tomato paste maker Erisco Foods Ltd moved its 150 billion USD tomato paste producing unit to China. With 22 brands and more than 2,000 employees in Nigeria, Erisco Foods has a 450,000 metric ton tomato paste manufacturing capacity (Agency report, 2017). Both internal and external variables may have an impact on a company’s financial success. The management-controllable internal elements are what cause profitability variations between businesses. External variables, on the other hand, are uncontrolled circumstances that influence a firm’s choice and over which management has no control. Yet, macroeconomic or market-specific variables, such as the expansion of the money supply, interest rates, inflation rates, and gross domestic product, are beyond of management’s control.

Thus, the research compared the financial performance of consumer goods businesses in Nigeria to three company-specific factors (liquidity, leverage, and firm size) and two macroeconomic variables (GDP growth rate and inflation rate). The selection of these five variables was based on their empirical relationship with the dependent variable as well as the fact that they frequently appeared in the literature as potential predictors of financial performance. For example, Duraj and Moci (2015), Mirza and Javaed (2013), and Ongor and Kusa (2013), among others, all used at least one of these variables, and their findings demonstrated that these variables were significant predictors of a firm’s financial performance.

Nigeria’s consumer goods industry has a lot of room to grow. Poverty levels are still relatively high, with food and other essentials dominating consumer spending. Because of this, the consumer goods industry’s food subsector has a relatively sizable market to serve, but penetration rates in the other categories still have a lot of opportunity to grow. The primary factors of the financial performance of the Consumer Goods sector are examined in this research, including liquidity, leverage, business size, GDP growth, and inflation.


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