Effect Of Macro-Economic Variables On The Financial Performance Of Quoted Consumer Goods Manufacturing Firms In Nigeria

Abstract he performance of manufacturing firms is affected by both macroeconomic and microeconomic variables. It is imperative therefore that businesses are aware of these factors to reduce the impact of these variables on their future cash flows and profitability. This study examines the effect of macroeconomic variables on the financial performance of quoted consumer goods manufacturing firms in Nigeria, with a particular focus on the relationship between the dependent variable, return on assets (ROA), and the independent variables exchange rate, money supply, and interest rate. Utilizing an ex post facto research design, the study adopts a cross-sectional time-series approach through panel data covering 2013 to 2022. Employing statistical tools such as E-Views 12.0, the research delves into the complex interactions between these macroeconomic determinants and the financial outcomes of consumer goods manufacturing firms. The study's findings reveal that the exchange rate holds a statistically significant negative impact, money supply exhibits an insignificant positive effect, and the interest rate demonstrates a significant negative influence on the financial performance of quoted consumer goods manufacturing firms in Nigeria. Given these outcomes, the study recommends that Nigerian consumer goods manufacturing companies should carefully manage their exposure to exchange rate fluctuations due to their substantial impact on financial performance. Additionally, manufacturing firms should not ignore the broader economic context. Fluctuations in money supply can still influence the overall business environment, affecting consumer spending patterns, demand for goods, and macroeconomic stability. Firms should stay attuned to economic indicators and policy changes that might impact the money supply.