Influence of Firm Size, Leverage, and External Environments on EPS of Quoted Consumer Goods Firms in Nigeria
Keywords:
corporate attributes, earnings per share, firm size, leverage, inflation rate, governance, share price, Nigeria
Abstract
This study examines how internal corporate characteristics—specifically firm size and leverage affect earnings per share among listed consumer goods companies in Nigeria, while also assessing the moderating influence of external environmental factors such as inflation and governance quality. Panel data covering 14 consumer goods companies listed in Nigeria from 2006 to 2023 were analyzed using Ordinary Least Squares (OLS) regression techniques. The results show that neither firm size nor leverage significantlyimpacts EPS. However, when considering macroeconomic interactions, leverage combined with inflation was found to significantly reduce EPS, highlighting the heightened risk associated with debt financing in inflationary conditions. Conversely, governance qualitydid not significantly alter the relationship between corporate attributes and firm value. Share price emerged as a robust control variable, demonstrating a strong and positive correlation with EPS. These findings underscore the importance of external macroeconomic and institutional contexts in shaping the profitability of firms and provide practical insights for corporate decision-makers and policymakers aiming to improve firm-level performance in emerging markets.
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References
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integrative review of metrics, methods, and findings and an agenda for future research. International Journal of Research in Marketing, 38(4), 857-876.
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relationship between capital structure and dividend payout of quoted agriculture firms in Nigeria. International Journal of Management and Economics Invention. 10(7). DOI: 10.47191/ijmei/v10i7.02
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manufacturing companies in Nigeria. International Journal of Business and Finance Management Research, 7(1), 25-32.
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financial performance: A study of selected quoted manufacturing firms in Nigeria. Asian Journal of Accounting Research, 3(2), 142-168.https://doi.org/10.1108/AJAR-09-2018-0029
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A Special Reference to listed Companies of Colombo Stock Exchange (CSE) in Sri Lanka. International Journal of Technological Exploration and Learning, 2(4), 166-171
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of listed consumer firms. Ulysses International Journal of Humanities and Contemporary Studies, 3(2), 183-202.
Evbayiro-Osagie, E. I., &Enadeghe, I. B. (2022). Capital structure and performance of non-
financial firms in Sub-Sahara Africa. International Journal of Finance Research, 3(1), 49-62.https://doi.org/10.47747/ijfr.v3i1.682
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Economics, 26(2), 301-325. https://doi.org/10.1086/467037
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71(4), 545-565.
Fama, E. F. (1970). Efficient capital markets: A review of theory and empirical work.
The Journal of Finance, 25(2), 383–417.
Farooq, U., Hayat, U., Azam, M., & Haroon, U. (2024). The Influence of Moderate Leverage
Impact of Liquidity Ratios on the Financial Performance of the Sugar Sector in Pakistan. Journal of Excellence in Management Sciences, 3(1), 45-58. Retrieved from https://journals.smarcons.com/index.php/jems/article/view/206
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of governance on economic growth: Panel data evidence from the emerging market. Corporate Governance and Organizational Behavior Review, 6(1), 42-55. https://doi.org/10.22495/cgobrv6i1p
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from South Africa. The Quarterly review of economics and finance, 53(2), 140-151. https://doi.org/10.1016/j.qref.2013.02.004
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from the United States. International journal of management, 28(4), 3-15
Handoyo, S., & Anas, S. (2024). The effect of environmental, social, and governance (ESG) on
firm performance: the moderating role of country regulatory quality and government effectiveness in ASEAN. Cogent Business & Management, 11(1), 2371071.https://doi.org/10.1080/23311975.2024.2371071
Hillman, A. J., & Dalziel, T. (2003). Boards of directors and firm performance: Integrating
agency and resource dependence perspectives. Academy of Management Review, 28(3), 383-396. https://doi.org/10.5465/amr.2003.10196729
Ikilidih, J. N., &Dibua, E. C. (2023). Long term debt ratio and earnings per share of listed
manufacturing firms in Nigeria. Scholarly Journal of Management Sciences Research, 2(12), 1-9.
Jain, R., & Kumar, R. (2023). Effect of COVID‐19 Lockdown on the Profitability of Firms in
India. Economic Papers: A Journal of Applied Economics and Policy, 42(1), 54-71.
Jensen, M. C. (1986). Agency costs of free cash flow, corporate finance, and takeovers. American
Economic Review, 76(2), 323-329.
Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: Managerial behavior, agency costs
and ownership structure. Journal of Financial Economics, 3(4), 305-360. https://doi.org/10.1016/0304-405X(76)90026-X
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Published
2025-04-27
How to Cite
Henry, W., & Ndubuisi, O. (2025). Influence of Firm Size, Leverage, and External Environments on EPS of Quoted Consumer Goods Firms in Nigeria. GPH-International Journal of Applied Science, 8(03), 44-65. https://doi.org/10.5281/zenodo.15289807
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