Determinants of profitability of Consumer Goods Companies listed on the Nigerian Exchange Group

Abstract

This study examines the determinants of profitability of Consumer Goods Companies listed on the  Nigerian Exchange Group. The researcher investigates three specific objectives: whether Corporate Governance Attributes, Working Capital Attributes and Financial Attributes were determinants of Profitability of Consumer Goods Companies in Nigeria. The methodology employs Correlational Research Design to analyze secondary data collected. The population consists of twenty-one (21) Consumer Goods Companies listed on the Nigerian Exchange Group. Purposive sample of Nineteen (19) Consumer Goods Companies spanning a period of five years from 2018 to 2022 was used for this study. The secondary data was sourced from annual reports encompassing Corporate Governance Attributes, Working Capital Attributes and Financial Attributes. The study utilized Structural Equation Modeling to measure variables of the research. The findings revealed that Corporate Governance Attributes and Working Capital Attributes significantly determines profitability while Financial Attributes insignificantly determines profitability of Consumer Goods Companies in Nigeria. Based on these findings, the study recommended manageable board size and audit committee meetings, keeping of adequate working capital to settle daily transactions and focusing on the Governance Attributes and Working Capital Attributes especially when Return on Asset (RoA) is considered as a measure of profitability.