Determinants of Profitability of Selected Quoted Consumer Firms in the Nigerian Exchange Group

Factors accounting for the nature of profitability of some quoted firms in the consumer sector of Nigerian Exchange Group are not known due to the recent paucity of researches in the sector. Therefore, this research is motivated by inquisitiveness triggered by agency theory problem to find out whether the managements are exercising due diligence given the firm specific variables under their control. The study focused on examining factors that affect profitability of selected quoted companies in the Nigerian Exchange Group’s consumer sector. The population comprised 20 quoted consumer firms from which a sample size of 13 firms was selected using a purposive sampling technique. Data of ten years (2012-2021) based on information taken from the released yearly financial accounts of the firms was used. The data were described using descriptive statistics and the variables were also tested for correlation using Pearson correlation analysis. Panel regression was used to estimate the model. Hausman test was conducted and it was found that random effect model was more appropriate. The result revealed that: financial leverage has a positive but insignificant effect; firm growth, a negative and significant effect; and firm size, a considerable improvement effect, all on profitability. Therefore, it is recommended that the management of the firms should invest wisely while the board of directors should monitor expenses. Secondly, the firms’ management should consolidate on their respective size so as to enjoy more economies of scale