EFFECT OF FIRM CHARACTERISTICS ON FINANCIAL PERFORMANCE OF LISTED INDUSTRIAL FIRMS IN NIGERIA

Abstract

This study examined the effect of firm characteristics on the financial performanceof listed industrial firms in Nigeria, covering a ten-year period from 2015 to 2024. The studyspecifically investigated the influence of firm size, firm age, and leverage on financial performance,measured by return on assets (ROA). The population comprised all industrial firms listed on theNigerian Exchange Group, while a purposive sampling technique was employed to select five firms:Berger Paints Plc, Beta Cement Plc, Dangote Cement Plc, Lafarge Africa Plc, and Premier PaintsPlc. Secondary data were obtained from the annual reports of the sampled firms, and an ex-postfacto research design was adopted. Data analysis was carried out using descriptive statistics andPooled Ordinary Least Squares (OLS) regression technique. The results revealed that firm size hasa positive but statistically insignificant effect on ROA, while firm age and leverage have statisticallysignificant negative effects on ROA. The study concluded that although larger firm size mayenhance performance, excessive firm age and high leverage levels tend to reduce profitability. Itwas recommended that industrial firms adopt efficient capital structure management practices andmaintain operational flexibility to sustain financial performance over time.