EFFECT OF FIRM SIZE AND PROFITABILITY ON FIRM VALUE OF LISTED CONSUMER GOODS COMPANY IN NIGERIA

Abstract

This study examines the impact of firm size and profitability on firm value among consumer goods companies listed on the Nigerian Stock Exchange. Panel data spanning from 2013 to 2022 are utilized, encompassing 18 firms within the consumer goods sector. The robust regression analysis is employed to explore the relationships between these variables, controlling for other relevant factors. The results reveal a statistically significant negative coefficient for firm size. Conversely, Profitability demonstrates a positive relationship with firm value, suggesting that companies with higher Profitability tend to exhibit greater market valuation. The study concludes that firm size has a significant negative impact on the firm value of listed consumer goods companies in Nigeria, indicating that larger companies may face challenges such as operational complexities and inefficiencies that can diminish their market value. Additionally, profitability does not significantly influence firm value, suggesting that other factors, like external market conditions or financial structure, may be more pivotal in determining a company's worth. To address these issues, the study recommended that consumer goods companies focus on improving operational efficiency and managing growth carefully, alongside implementing strategies that enhance profitability, such as effective cost management and innovation in products or services.