CHAPTER ONE

INTRODUCTION

1.1 Background to the Study

The primary objective of any firm is to earn more profits and enhance the wealth of its

stakeholders. However, the performance of firms do not only play the role to increase the

market value of that specific firm but also leads towards the growth of the whole industry

which ultimately leads towards the overall prosperity of the economy (Abdullahi,

Martins, Jude, & Ado, 2019). The subject of market value has also receive significant

attention from scholars in the various areas of business and strategic management. It has

also been the primary concern of business practitioners in all types of organizations since

market value has implications to organization’s health and ultimately its survival. High

performance reflects management effectiveness and efficiency in making use of

company’s resources and this in turn contributes to the country’s economy at large

(Mayah & Onuigwe, 2023).

Firms make several strategic decisions which are usually moderated by the specific and

governance attributes of each firm. These include financing decision, investing decision

and operational decision (Owolabi, 2017). Thus, firm value is often measured from

stability in corporate governance and operational stamina of the firm. This stability is

seen in board capacity, Firm size, leverage and liquidity to meet maturing obligations.

Prior studies pointed that manufacturing sectors are drivers of economic growth, a

country can only experience real development when there is improvement in the

performance of its manufacturing sector.

The main goal of any business is to increase the shareholder’s welfare by

increasing the value of a firm (Salvatore, 2005). Maximizing firm value is essential for a

company because it means increasing the prosperity of shareholders as well, which

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becomes the company’s main goal. However, a good firm value is able to attract other

parties’ interests to join the company. In other words, performance on the stock market is

an index or indicator of corporate success. Any corporate entity experiencing a rise in the

market price of its stocks is considered a good company by the investors. Modigliani and

Miller (1958) stated that firm value is determined by company’s asset earnings power. If

the company predicted good prospects in the future, the value of the stock will be higher.

Otherwise, if the company has fewer prospects the stock price will be low.

Sound financial performance that is market value therefore, is critical for the

survival, sustenance and sturdiness of the business firm (Saddam, 2021). The

imperativeness of achieving healthy financial performance is very crucial to firms’

stakeholders, capital market development and the national economic growth. Even in the

era of development of business disruptive technologies, innovations and inventions,

strong corporate financial performance takes a center stage to prevent business failure

(Enyi &Ajibade, 2021).Financial strategic plan provides direction and serves as a road

map to guide organization’s activities towards achievement of superlative performance.

This aids continued business growth in value creation, returns and sustainable value

relevance (Elbanna, Andrews, &Pollanen, 2016). Implementation of business firm’s

financial strategy is meant to create market value to all stakeholders and performance

growth consistently (Adegbie & Akenroye, 2020). Growth in a firm’s financial

performance indicators is important to achieving sustainable results. Analyzing the

health status of market value of a business firm is fundamental to its growth (Okoye,

Erin, Ado, &Isibor, 2017). Properly configured and managed firms’ strategies through

the development of its unique resource capability, deepens its growth, competitive

positioning and capacity to achieve impeccable going-concern objective (Ndegwa, Kilika

&Muathe, 2018). Utilization of firms’ attributes enables the firms to maintain both

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internal and external competences, sustain their strategic positioning and drive their

financial performance (Kabue & Kilika, 2016). Consumer goods producing companies

require the development, deployment and utilization of their own peculiar attributes and

contingencies in order to maintain a steady growth of their business operations and

performance.

1.2 Statement of the Problem

Firm attributes are the firms’ operational variables that affect the firms’ decisions

(Abdullahi et al, 2019). Among the notable variables that mirrors firm attribute are firm

size, leverage, profitability and other governance variables. Although, Firm size has

become dominant in empirical corporate finance studies and has been widely established

among the most significant variables (Kioko, 2013). Studies, also documented mixed

results on the effect of size, while others made a found a clear result (Tarawneh, 2006).

Beginning with Enron, WorldCom Marconi, Parmalat, and Xerox, corporate accounting

scandals affected both Europe and the United States at the start of the twenty-first

century. Nigeria saw its fair share of accounting issues as well. Companies like Cadbury

and Bank Oceanic have engaged in financial fraud; as a result, investors' faith in

management and their published financials has decreased, and concerns about the

accuracy of financial reporting have been raised (Iwedi, 2017). In order to prevent

outside interference, managers always seek to secure all of the finances required to keep

the organization operating, while also seeking to benefit in any manner they can from it

(Ugoani, 2015). Researcher therefore pointed that a robust corporate governance

structure is an iron cast for such failures. That is standardizing the consumer goods

operation policies and setting the stage set for improved value of banks. Most of the

empirical studies outside Nigeria like the study of Alghusin (2015) investigates the

impact of company characteristics on profitability of Jordanian industrial companies, the

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 study of Sweety and Kuar (2014) determine the impact of firm-specific characteristics on

shareholders’ value of listed companies in India, the study of Kaguri (2013) determine

the relationship between firm characteristics and financial performance of life insurance

companies in Kenya. In Nigeria, most of the studies focused on building materials, oil

and gas, financial services firms ( Ibrahim and Hussaini, 2015; Mohammed, 2015;

Abdullahi ,2016). A few of the aforementioned studies examines the impact of firm

attributes on value of firms of listed Nigerian consumer goods companies. Therefore, the

present study attempts to cover the gap by examining firm attributes within the

dimension of, liquidity, financial leverage and profitability whether the variables have

impact on the market value of listed consumer goods firms in Nigeria.

1.4 Objectives of the Study

The main objective of the study is to examine the impact of the effect of firm attributes

on market value of listed consumer goods firms in Nigeria, while the specific objectives

are to:

i) investigate influence of liquidity on market value of listed consumer goods firms in

Nigeria.

ii) evaluate the effect of financial leverage on market value of listed consumer goods

firms in Nigeria; and

iii) assess the influence of profitability on market value of consumer goods firms in

Nigeria

1.3 Research Questions

(i) What is the influence of liquidity on market value of listed consumer goods firms

in Nigeria?

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(ii) What is the effect of financial leverage on market value of listed consumer goods

firms in Nigeria?

(iii) How does profitability affect market value of listed consumer goods firms in

Nigeria?

1.5 Research Hypotheses

Based on the objectives above, the study hypothesized that:

Ho1: liquidity has no effect on market value of listed consumer goods firms in Nigeria

Ho2: Financial leverage has no influence on market value of listed consumer goods

firms in Nigeria

Ho3: Profitability has no effect on market value of listed consumer goods firms in

Nigeria

1.6 Significance of the Study

This study would no doubt contribute to existing studies as it provides additional

evidence to scarcely existing ones on the identification of the firm attributes on the firm

value of listed consumer goods firms in Nigeria.

The study would go a long way to highlight the causes of corporate failure, especially in

the area of study, the economic consequences of weak corporate attributes and the

contribution of well managed or structured plan towards increasing the value of firms,

and by extension, shareholders wealth.

This research work would be of relevance to board member, top management, academics

as well as shareholders or investors at large. A corporate attribute would give

management all the right incentives to make value maximizing investment and financing

decision.

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This study added to the general body of knowledge, on the impact of firm attributes and

firm value of listed Nigerian Deposit Money Banks; which is a very sensitive and vital

sector. It also expands the body of literature in terms of its scope in integrating both

firms’ internal factor, regulatory factor and the economic factor that may mitigate firms’

value.

This study would further provide an insight into understanding the degree to

which the consumer goods firms in Nigeria that are reporting on their corporate

governance have been compliant with different sections of the codes of best practice and

where they are experiencing difficulties. The study would also provide a reference

material for researchers and scholars who might want to research into the study area in

the future.

1.7 Scope of the Study

This study focused on firm attributes and market value of listed consumer goods

firms in Nigeria. The scope of the study was limited to ten (10) firms for the period of 10

years from year 2012 to 2021. The choice of 2012 as base year was necessitated by the

fact that it was a year shortly after the listed companies were mandated by law to start

preparing their accounts from January to December and it was also the period when

listed companies started preparation of their financial statements in line with dictates of

IFRS.

1.8 Operational Definition of Terms

Firm attributes are variables that affect the firm’s decision both internally and

externally

Tobin’s Q: This is obtained by adding market value of equity plus book value of debt

(Long term + Short term) divided by total assets.

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Earnings per share (EPS): This is the portion of the company’s distributable profit

which is allocated to each outstanding equity share. It equals to ordinary share dividend

to number of ordinary shares.

Leverage refers to the proportion of debt to equity in the capital structure of a firm

Profitability is the most important and reliable indicator of corporate growth as it gives

a broad indicator of the ability of companies to raise their income level

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 CHAPTER TWO

LITERATURE REVIEW

2.1 Conceptual Review

2.1.1 Firms’ Attributes

Firm’s attributes are the specific features that define and differentiate an individual firm

in terms of the uniqueness of its resources being utilized in its operations from other

corporate entities. These attributes include: firm age, firm size and leverage

(Kwaltommai et al, 2019). This implies that firms’ attributes are those unique

individualities that set a business firm apart from its peers which relatively are the

strategic drivers of the firm’s decision-making processes and performance parameters

both endogenously and exogenously. But Farouk et al, (2019) differently viewed firms’

attributes as structural elements that may either be controllable or uncontrollable factors,

which may be internal or external to the company’s strategic decision..

Firms’ attributes are firm’s differentiating factors within an industry that determines the

firm’s business units across the specific industry. This implies that firms’ attributes are

business specific attributes that drive corporate income generation. According to Irom et

al, (2018), firms’ attributes are the specific firm factors that either negatively or

positively affect the operations of a firm. Such attributes include: leverage, market share,

liquidity, firm age, firm size, capital and dividend. Similarly, Siyanbola et al, (2020)

viewed firms’ attributes as those attributes that are typical to a business firm, which

include: profitability, size and age. Firms’ attributes are identified internal structure,

unique strategies and distinctive profiles of organizations, which are resource-based, that

affect the performance and success of the business firm (Oluwatayo, Amole &Alagbe,

2019). Hence, firms’ unique attributes are important dynamics or elements that are used

to influence firms’ level of profitability and going concern. It deals with qualitative

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nature of firms’ performance, but which are measured with the use of quantitative

metrics

Ali and Isa (2018) define corporate attributes as firm characteristics or specific

features that distinguish one firm from another. Those corporate attributes distinguishes a

corporate organization from others, they includes: the size, leverage policy, performance,

age, firm growth, management efficiency, firm stability etc. those characteristics can

influence the level of performance. They can influence the decision and operations of the

firm. For instances firm pursuing growth, this will influence the level of resources as

firm with high growth rate tend to invest more in assets and other resources that will

guarantee it growth than firm with low or stagnated growth. A firm in growing stage will

tends to invest but also satisfy its investor s in other to ensure their continue investment.

A high performing firm with high turnover will require higher level of operation (high

inventory, processing and cash) to meet its customers demand.

Thus, a firm with high level of turnover, in other to meet its obligations will tends

to maintain such level of resources which may be different from others, especially

current assets. Older (age) firm is believed by Ericson and Pakes, (1995) to be associated

with experience which leads to standardize, coordinate and speed up operation, hence

such firm over the years has established standard which help them in determining the

level of resources to keep at any point in time compare to younger firms. Older firms due

to the standard set for most activities and well established policy for various aspect of

operations may perform better than young firms. Liquidity policy like other firm policy’s

are established over time, tested and adjusted in older firms compare to in new firms.

This study used: firm size, operating efficiency, assets tangibility, leverage, firm growth,

firm age firm stability as corporate attributes.

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2.1.2. Measures of Firm Attributes

2.1.2.1 Liquidity and Market Value

Liquidity is one of the major predictor variables in this study and is a ratio that measures

a company‘s ability to meet its current obligations. Based on the signal theory, the ability

of a company to meet its current obligations invariably will have positive response from

the stock market which causes the company‘s value to rise so to say that liquidity affects

the firm value (Yanti & Darmayanti 2019). Any company without sufficient amount in

current assets will have challenges in its processes and if a business has a high amount of

current assets, in turn, shows that the return on investment for the firm is in good

position.

Liquidity is a ratio that aims to measure a company's ability to meet its short-term

obligations. A company that has high liquidity means that it can pay the short-term debt,

so it tends to reduce total debt, which in turn capital structure will be smaller, so it can be

said that liquidity affects the capital structure. By the Pecking Order theory which

suggests that managers prefer to use financing in the first order of retained earnings, then

debt and finally the sale of new shares. This is supported by research conducted by

Septiani &Suryana, 2018). Based on the signal theory, the ability of a company to meet

its short term obligations will get a positive response by the stock market which causes

the company's value to rise so that it can be said that liquidity affects the value of the

company. This is supported by research (Yanti&Darmayanti2019).

The capacity of business entities to pay off maturing financial pledges, primarily

short-term debts, is known as liquidity. It may also be seen as one asset's timely and

economic exchange for another. When an asset holder has to convert an asset into cash, it

must do it quickly and reliably (Acharya & Naqvi, 2012). Kurotamunobaraomi et al,

(2017) expanded on this idea by stating that liquidity is the ability to swap an asset

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quickly and cheaply. Liquidity is the likelihood that a company will be able to repay its

debt, which includes payment for operational expenses and compensation for losses or

gains. This likelihood demonstrates the ability to convert an asset into cash on schedule

and the businesses' capacity to manage and maintain their working capital at normal

levels (Bordeleau & Graham, 2010).

Liquidity shows the company's ability to meet short-term financial obligations. High

liquidity can influence investors to invest in companies so that demand for company

shares will increase and cause an increase in stock prices. Liquidity is a serious concern

for the company because liquidity plays an important role in the company's success.

Research conducted by Farooq & Masood (2016) revealed that liquidity has a positive

and significant effect on firm value. Companies that have good liquidity will be

considered to have good performance by investors. This will attract investors to invest

their capital in the company. The research results of Cheung et al. (2015) and Tahu

&Susilo (2017), explain that liquidity has a positive effect on firm value which is proxied

by Yanti & Dwirandra (2019), analysis in his study entitled corporate liquidity and firm

value: evidence from China's Listed Firms explained that there is a positive and

significant relationship between liquidity and firm value. The signaling theory states that

companies that have a high level of liquidity, then the company can manage the available

funds well to maximize the company's operations so that it gets high profits and can pay

off short-term debt (Fajaria &Isnalita, 2018). High profits can be a positive signal for

investors so as to increase the firm value (Fajaria &Isnalita, 2018).

2.1.2.2 Financial Leverage and Market value

This is another predictor variable that takes an important position in maximizing firm

value and the addition of corporate debt may serve as an instrument for controlling the

cash freely by the management. The rising in fund control thereby enhances the bank’s

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performance. Therefore, it will influence the strengthened bank value as reflected via the

rise in the stock exchange price (Mediawati, 2016). Hermuningsih (2012) disclosed that

leverage had a positive and significant influence on the firm value but the results of

Wulandari (2013) gave different results that leverage had a significant negative effect on

the firm value.

Financial leverage is a comparison of a company's long-term funding as indicated

by a comparison of long- term debt to equity. Meeting the company's funding needs from

its capital comes from share capital, retained earnings, and reserves. If the capital itself is

still experiencing a shortage (deficit), it is necessary to consider funding from external

companies, namely from debt (debt financing) (Meidiawati & Mildawati: 2016; Ríos et

al. 2019). In practice in the company conflicts often occur called agency conflicts due to

related parties namely principals and agents who have conflicting interests. Based on the

Trade-Off theory which explains that if the capital structure of the company is below the

optimal point, then every additional debt the company will make the company's value

goes up. The problem is caused by the tax savings made by the company so that the

capital structure can affect the value of the company. This is supported by the research of

Kristianti 2018) and Yanti &Darmayanti 2019).

2.1.2.3 Profitability and Market Value

Bhattacarya (1979) suggested that high profitability indicates good company prospects

so that investors will respond positively and firm value will increase. Increasing earnings

payments indicate a better prospect for the company so that investors will respond

positively and the firm value will increase. This study supports the theory that

Moddigliani-Miller revealed that the firm value is determined by the profit from the

company's assets. Positive results indicate that the higher the more efficient the turnover

of assets or the higher the profit margin obtained by the company so that it will have an

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impact on increasing firm value. Tahu and Susilo (2017), states the same thing,

profitability has a positive and significant effect on firm value. The results of the study

are in line with research conducted by Hasbi (2015), which states that capital structure

has a positive and significant influence on firm value. Zuhroh (2019) in his research

entitled the effect of liquidity, firm size and profitability on the firm value with

Mediating Leverage revealed that profitability has a positive and significant effect on

firm value. The results of Fajariaand Isnalita (2018), revealed that profitability can

significantly increase firm value.

Profitability affects the value of the company, causing a positive response from investors

who can make an increase in stock prices in the market which ultimately increases the

value of the company in the eyes of investors (Yanti & Darmayanti: 2019). Unlike the

research conducted by (Pribadi 2018) and (Nugroho &Abdani 2017) which shows

profitability does not affect firm value. The profitability of the previous period was an

important factor in determining capital structure. Empirical evidence conducted by

(Guna &Sampurno: 2018) shows that profitability affects the capital structure. This

supports the pecking order theory which states that the higher the profitability of a

company, the lower the use of debt. Research Septiani&Suryana2018) states that

profitability does not affect capital structure

2.2. Theoretical Review

2.2.1 Agency Theory

One of the oldest theories underpinning modern corporate management is the agency

theory. The agency theory was originally attributed to Berle and Means (1932) in their

classical documentary on “The Modern Corporation & Private Property”. Subsequently,

the theory was later expanded and brought to the fore by Stephen Ross and Barry

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Mitnick in 1973 (Mitnick, 2019, 2021). However, in 1976, the agency theory was widely

popularized by Jensen and Meckling. Hence, the generally-accepted proponent of

modern agency theory is attributed to Jensen and Meckling (1976). The foundation on

which the agency theory was hinged upon is on the business entity concept that

recognizes the separation of a company’s legal entity form, in which the life of the

owners of the business entity is distinctively separated from governance of the entity

(Macey, 2019). Agency theory is derived from a business arrangement whenever there is

a dichotomy and divergent of interests between equity holders and corporate managers in

the governance of an incorporated business entity (Panda &Leepsa, 2017). Hence, under

the agency arrangement, the shareholders (the principal) relinquish their authority to the

managers (the appointed agent) being delegated to act on its behalf in making relevant

governance decisions for the smooth running of the business (Parker, Dressel,

Chevers&Zeppetella, 2018).

This dichotomous separation of interests between the contracting parties in the agency

relationship continues to abound to the present dispensation even in the midst of

contemporary advent of scientific disruptive technologies that are meaningfully

influencing the interaction of humans with the corporate world thereby posing futuristic

challenge to the aged-long belief of artificial legal personality of body corporate

(Solaiman, 2017; Watson, 2021; Godwin, Lee & Langford, 2021; Tjio, Lee &Koh,

2021). The Principle of agency in contemporary business organization’s governance is

inherent with conflicts of interest (Li, 2018). This is what Jensen and Meckling (1976)

argued and entrenched in their explanation of the agency cost theory within the purview

of corporate management. Hence, to achieve the objective of the organization under the

agency theory, the agent is consequently monitored (Parkeret al. 2018). Although, the

agent uses it discretion to carry out its role in this arrangement, Jensen andMeckling

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(1976) posited that monitoring role is instituted to reduce the level of information

dysfunctionality that may exist between the equity holders and the management.

According to Zogning (2017), the principle of agency is premised on dual behavioural

premises: the first is that parties mainly pursue their selfish interest to exploit and

optimize their benefit or utility in the relationship; and the second is that the contracting

parties are probably driven by ulterior motive in order to maximally gain from the

inconclusiveness of the legally enforceable agreement and relationship in the union. The

assumptions underlining agency theory include: that both parties (the agent and the

principal) are driven by self-centeredness that causes conflict of interests between them

(Payne &Petrenko, 2019); that the agent individualistically pursue in his decision making

while the principal is opportunistic in its manner of behavior (Wagner, 2019); that the

principal is engrossed with wealth maximization orientation through optimization of

corporate value (Goshen & Squire, 2017); and the existence of high agency loss that is

inherent in the relationship resulting into information asymmetry (De-Villiers, Venter, &

Hsiao, 2017) coupled with the existence of bounded rationality and moral hazard

(Kotlar&Sieger, 2019).

Several scholars have opined that the fundamental problem of principal–agent

relationship is marred by ulterior incongruent goals between the contracting parties that

include the agent’s selfishness in decision making, resulting into sub-optimality due to

asymmetric information against the principal (Panda &Leepsa, 2017; Rahmawati, 2018).

Some other critics have argued that the concept of agency is sometimes unfitted to

societal life, since it is presumed that parties are individualistically self-centered having

their behaviours and respective outcomes of their actions thereby subjecting the

relationship to some form of controlls (Zogning, 2017). Yet some other scholars have

contended that agency theory results into the problem of unilateralism

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(Pouryousefi&Frooman, 2017). This consequently means that agency problems do cause

suboptimal corporate performance growth, which is widespread across international

boundaries. For instance, corporate managers may undertake managerial

overcompensation and overinvestment in projects that will advance managerial

perquisite and prestige of their office, but which will not enhance the maximization of

the shareholders’ wealth (Moin, Guney& El-Kalak, 2020).

2.2.2. Resource-Based View Theory

The proponent of Resource-Based View (RBV) theory was Birger Wernerfelt who, in

1984, published major works that were anchored on the use of resources as a

differentiating performance growth level of the firm. According to Lavie (2008), the

RBV is a corporate strategic model employed to analyze and determine the core resource

requirements that a firm need to possess and exploit to drive its operational efficiency in

order to achieve comparative and competitive advantage for its perpetual performance.

This implies that RBV theory posits that firms have heterogeneous and somewhat

dissimilar performance, which necessitates them to possess varied and assorted resources

that requires different firms to structure uniquelydissimilar strategic plans in the

development, acquirement and utilization of different mixture of resources in the

management of their organization (Tang, 2017).

Wernerfelt (1984) conceptualized that resource-based view of the firm, is a

strategic management approach used to analyze the criticality of firm’s specific internal

resources. This means that firm’s specific internal resources occupy a pivotal place in a

firm’s success factors that enables an entity to achieve competitive advantage. This

theory emphasizes the need for firms to look inward within the its endogenous resource

variables to drive the achievement of its competitive advantage instead of focusing on

competitive exogenous environmental determinants (Radjenović&Krstić, 2017). This

16
means that resource-based theory is a dynamic capability theory of the firm that focuses

on the primacy of utilization of internal resource determinants and combinations for

sustainable competitive advantage to the benefit of all stakeholders.

The core assumption of RBV theory is that it is based on deploying strategic internal

resources of the firm to achieve competitive advantage. These resources can be exploited

by the firm through its specific corporate attributes and strategy to attain sustainable

comparative advantage. According to Miller (2019), the RBV theory is management

theory, which postulates two assumptions: that resources of firms are uniquely

heterogeneous and imperfectly immobile across sectorial firms in an industry of an

economy. This implies that every business firm has a basket of heterogeneous resource

determinants, competences, skills and capabilities that are unique, differentiated, non-

substitutable and inimitable by the competitors in order to create value and achieve

competitive financial performance effectively (Daft, 1983, 2010). Thus, as Daft (1983)

further succinctly asserted, firm’s resources are “all assets, capabilities, organizational

processes, firm attributes, information and knowledge that are controlled by a firm to

enable the firm to conceive and implement strategies that improve its efficiency and

effectiveness”. This definitional perspective of a firm’s resources is the underlining

foundation on which the concept of uniqueness, heterogeneity and non-substitutability of

resource of the RBV theory is hinged upon across sectorial firms in an economy (Miller,

2019).

The resource-based view (RBV) accentuates the role of strategic or unique resources as

the basic driver of the firm’s competitive advantage, performance and growth. This

implies that the RBV is cardinal management approach and tool used to analyze

sustainable competitive advantage (Assensoh-Kodua, 2019). Essentially, globalization

has made firms to universally contend with one another with the deployment of their

17
unique resources and competences that differentiate them from others in such a way as to

grow their operations consistently and maintain high financial performance. The firm’s

strategy is anchored on the degree of their unique competitive resources and

competencies to mutually influence their performance and growth. This means that the

firm must leverage on the efficiencies of their respective resources that they possess and

utilize to sustainably differentiate the contributions and performances ofthe firm for their

growth and performance (Donnellan & Rutledge, 2019). Thus, the crucial characteristic

of the RBV is that it is an efficiency-based explanation of performance growth

determinants that differentiates one firm from the other.

In RBV, the firm’s comparative and competitive advantage is obtained from firm-

specific resources that are unique, inimitable, incomparable and superior in use, as

opposed to what other firms possess and deploy in driving their higher performance

levels of efficiency, elimination of waste, effective adaptation of methods and creating

greater value-addition to stakeholders; otherwise if firm’s resources are well managed,

the resource that serves as anchor strength today may become obsolete and turn out to be

its weakness at other time (Nagano, 2020). RBV therefore provides for a resource-level

and firm-level explanation of sustainable performance differential growth among firms.

This implies that RBT spotlights the firm’s-controlled resources and competences that

are unique, which underpin growth levels of performance among firms. According to

Hagoug and Abdalla (2021), RBV is a theory that emphasizes the peculiarity of internal

performance of a firm with the utilization of firm’s unique and inimitable resources for

its comparative and competitive advantage.

Therefore, to achieve the required level of financial performance, a firm’s resources must

be precious, uncommon, unique, incomparable and immobile across firms. The firm

must combine both homogeneous and heterogeneous resources in order to develop the

18
firm’s uniqueness that makes them irreplaceable as a source of competencies and

sustainable competitive advantage.

2.2.3 Stewardship Theory

Donaldson and Davis' seminar work led to the development of the stewardship theory in

1991. Managers are stewards when their actions and dedication support the goals and

missions of their proprietors. Stewards are those who voluntarily choose to carry out a

duty or be in control of a corporation's resources or assets (Donaldson & Davis, 1991).

The stewardship theory was created as an alternative organizational behaviour theory for

management theories of balanced action. According to this view, managers and

shareholders have the same interests; hence the corporate objective is to establish a

structure that makes it possible for them to work together as effectively as possible

(Hernadez, 2008). According to this view, organizational administrators often perform

honourably; hence, management control has no inherent difficulty. Stewardship theory's

central premise is that managers behave in a way that is consistent with the interests of

their shareholders. According to the notion, the manager's interests are less vital than the

corporate purpose shared by all business individuals. In a principal-steward partnership,

the shareholders win since transaction costs are reduced, and there is less need for

management oversight and financial incentives (Davis et al, 1997). In contrast to the

agent, the steward is more concerned with attaining group goals than individual ones.

The steward views the company's success as his accomplishment. The fundamental goal

of the stewardship theory is to pinpoint instances where the interests of the principal and

the steward coincide. According to the stewardship idea, becoming a steward or an agent

is the outcome of a logical process. The person assesses the benefits and drawbacks of

each stance during this reasoning process. Some contributions to the literature on

stewardship assert that while stewards are not always selfless, there are times when

19
CEOs believe that acting in the best interests of shareholders also serves their objectives

(Miller, & Breton-Miller, 2006). Agents in this situation would understand how the

firm's performance directly affects their performance and helps them efficiently manage

their careers.

2.2.4Signalling Theory

Michael Spence created the signalling theory in 1973 based on information gaps he had

noticed between firms and potential employees. However, its rational nature has since

applied to a wide range of other fields, including human resource management, business,

and financial markets. Understanding why some signals are reliable for making decisions

while others are not is the focus of signalling theory. For potential investors to make

informed investment decisions, the theory examines the accuracy and dependability of

accounting information provided by a company to its users (Carter, 2006). A successful

corporation sets itself apart from a failing one by conveying a trustworthy message about

its performance to capital markets and potential investors. The outputs of a company's

operational operations that alert investors to the prospects of the business are its signals.

The idea made the supposition that access to some crucial information about how a

company operates differs for managers and shareholders of a corporation. Only the

management can access information unavailable to the shareholders (Goranova et al.,

2007). The signalling theory was used in this study to support the corporate attributes of

firm size, liquidity, operating efficiency, firm growth, and leverage. A solid company's

liquidity situation demonstrates its capacity to satisfy short-term financial needs without

causing production to halt. Additionally, efficient management would enable a business

to maximize operational productivity, enhancing the firm's financial performance and

value. It sends a positive message to current and potential investors that the business can

continue to operate following the going concern concept of accounting and satisfy the

20
interests of its stakeholders by maximizing wealth (Janney &Folta, 2006). The theory

claims that accounting information signals to the market and impacts investment

decisions are pertinent to the study's premise.

2. 2. 5 Theoretical Framework

The theoretical framework on which this study will be hinged upon is signalling theory

because is the efficient management would enable a business to maximize operational

productivity, enhancing the firm's financial performance and value. It sends a positive

message to current and potential investors that the business can continue to operate

following the going concern concept of accounting and satisfy the interests of its

stakeholders by maximizing wealth. The theory claims that accounting information

signals to the market and impacts investment decisions are pertinent to the study's

premise.

2.3 Empirical Review

2.3.1 Liquidity and Market value

Takon and Mgbado (2020) assessed the impact of liquidity on banks’ profitability using

liquid assets, bank deposit, treasury bills, and return on asset as proxies. Secondary data

was source from the Central Bank of Nigeria statistical bulletin. The study employed

Ordinary least square using multiple regression techniques. The author found that

positive and insignificant impact between bank deposit and return on asset; negative and

insignificant impact between liquid asset and returnon asset; and positive and

insignificant impact between treasury bills and return on asset. Thestudy recommended

that appropriate measures should be taken to prevent undesirable marketdevelopment

that may negatively impact on bank deposit; and also the recruitment ofcompetent and

qualified personnel to manage and maintain optimal level of liquidity.

21
Otekunrin, Fagboro and Femi (2019) examined the performance of selected quoted

deposit money banks in Nigeria and liquidity management of 17 deposit money banks

listed on the Nigerian Stock Exchange (NSE) between 2012 and 2017, the study extracts

secondary data the financial statements of 15 deposit money banks for six years and

analyze the data using ordinary least square method (OLS). Capital ratio (CTR), current

ratio (CR) and cash ratio (CSR) were proxies for liquidity management while

performance proxies was return on assets(ROA). The author found that liquidity

management and bank’s performance are positively related and concludes that liquidity

management is an essential factor in business operations and consequently leads to

business profitability. The study recommended that proper liquidity management would

assist in solving the agency theory problem of agency costs that arise when control of

companies is separated from the ownership.

Bassey and Ekpo (2018) investigated the critical role played by the CBN and DMBs in

fashioning out appropriate framework for liquidity management and identifies the

challenges inhibiting effective performance of these roles. The study employed

descriptive research design and find that deposit liabilities constitutes a major source of

funding liquidity by DMBs while loans and advances constitutes the bulk of the illiquid

assets. The authors found that DMBs in Nigeria operates above solvency level, having

current ratio greater than unity and are over cautious, investing more in short-term

securities to protect their liquidity positions.

Onyekwelu, Chukwuani and Onyeka (2018) examined the effect of liquidity on financial

performance of deposit money banks in Nigeria for the period 2007-2016 using

secondary data from five banks. The study used multiple regression analysis and found

that Liquidity has positive and significant effect on both banks’ profitability ratios and on

Return on Capital Employed. The study suggested to investing in human capital, banks

22
should create for a where they sensitize their customers on variety of activities they

indulge in that are capable of hindering effective liquidity management and the

regulatory authority should put in place appropriate policy measures to ensure

compliance and check high volume cash transaction handling and hoarding prevalent in

the economy.

Obi-Nwosu, Okaro and Atsanan (2017) tested the effect of liquidity management on the

performance of DMBs in Nigeria from 2000 to 2015. The study employed Augmented

Dickey Fuller Unit Root Test, OLS regression and Granger Causality. The authors found

that liquidity mechanism is not significantly related to DMBs performance in the short

run and long run and also find that liquidity mechanism granger cause DMBs

performance within the period under review in the study.

Obi-Nwosu, Okaro and Atsanan (2017) assessed how liquidity management influenced

the performance of DMBs in Nigeria within a range 2000 to 2015. The study employed

Augmented Dickey- Fuller Unit Root Test, OLS regression, and Granger Causality.

Results disclosed that liquidity mechanism was insignificantly related

Okaro and Nwakoby (2016) tested how liquidity management influenced the

performance of Nigerian banks within the range 2000 to 2015 using OLS method to

analyze the data. The study gave a negative significant link between liquidity ratio and

profitability of Nigerian banks.

Du, Wu and Liang (2016) employed the Pearson correlation and regression analysisto

evaluate how firm liquidity influenced the corporate value of listed companies in China

during year 2013. The study disclosed that firm value was positively related to liquidity.

However, the outcome of one year may not be generalized for a good conclusion.

Though, empirical literature has been carried on liquidity as the evidence of reviewed

include; Olarewaju and Adeyemi (2015) examined the link between liquidityand

23
profitability of selected 15 Nigerian Banks using Pairwise Granger Causality to test

causality between the banks’ liquidity and profitability. The study discovers there was no

causal link between liquidity and profitability of selected banks. However, the study

failed to perform numerous diagnostic and robustness check to validate the findings.

2.3.2 Leverage and Market Value

Efuntade, and Akinola, (2020) examined the impact of firm attribute on the

financial performance of quoted manufacturing firms in Nigeria. Descriptive and cross

sectional research design were adopted to investigate the relationship between the

variables of firm characteristics and financial performance of quoted manufacturing

firms in Nigeria over a period of 14 years. Secondary Data were obtained from annual

reports of five selected quoted manufacturing firms. Panel least square regression model

was used to test the formulated hypothesis. Findings showed that all the independent

variables jointly and strongly have impact on the financial performance of manufacturing

firms in Nigeria measured by return on assets. It was concluded the explanatory variables

(Firm Age, Firm Size, Sales Growth, Liquidity and Leverage) were significantly

associated with the dependent variable (Return on Asset).

Agarwal and Singh (2022) analyzed the efficacy of firm structure as a corporate

governance tool. In their study, they examined the effect of firm size, firm age, firm

growth, the board size, and independent directors on a board, on corporate performance.

They employed a sample of 270 Indian IT companies, all of which were listed on the

Indian National Stock Exchange. The study found a positive impact of firm size, firm

age, and independent directors on corporate performance. They further buttressed that

the larger board size can reduce corporate performance, which can lead to a lack of

coordination, flexibility, and communication. The study also pointed that more members

on a board can be the cause of conflict, either in terms of views or opinions, which

24
ultimately leads to the wastage of financial and time resources. They also found growth

of the firm to have an insignificant impact on corporate performance as their sales

figures have a recessionary impact.

Uzoka, Ifurueze and Anichebe (2020) evaluated the effect of corporate attributes

and performance: an interaction approach. The study formulated seven objectives and

hypotheses. The study adopted on ex-post facto design and used panel data collected

from the financial reports of industrial firms in Nigeria from 2009 and 2018. The data

were analyzed using ordinary least square regression. However, the result indicated that

though operating efficiency, assets tangibility and leverage policy has negative and

significant effect on performance. Firm age and corporate stability has negative but

insignificant effect on performance. Firm growth and firm size has positive but

insignificant effect on performance. The authors found that the combination of operating

efficiency with assets tangibility has more impact on performance than combination of

any other attributes.

Widyastuti (2019) discussed the effect of liquidity, activity and leverage on

company performance and the value of food and beverage companies listed on the

Indonesia Stock Exchange. The study considered all food and beverage companies listed

on the IDX as a population and data were taken in time series for 3 years, 2015, 2016

and 2017. The study used multivariate analysis for data analysis .The author proved that

liquidity as measured by CAR, CHR, QAR has a positive and significant effect on

financial performance as measured by NPM, ROA, and financial performance has a

significant positive effect on firm value as measured by PBV, PER and Tobin’s q. While

activities measured by PAT, PMK, PTA and leverage measured by DAR and DER did

not significantly influence financial performance and firm value.

25
 Abdullahi, Martins, Jude, and Ado, (2019) examined the impact of firm

characteristics and financial performance of consumer good firms in Nigeria.

Specifically, it tested the effects of firm size, firm age and leverage on financial

performance (return on equity). The study employed both financial and non-financial

data from annual reports of the 5 listed consumer good firms in Nigeria from 2007-2016.

The data was analyzed using descriptive statistics, Pearson correlation and multiple

regressions. The result showed that the firm size, has a positive relationship with

financial performance, firm age also has a positive relationship with financial

performance and leverage too has a positive relationship with financial performance.

2.3.4Profitability and Market value

Mayah andOnuigwe, ( 2023) investigated the impact of firm attribute on

performance of listed Deposit money banks in Nigeria from (2011-2020). Ex-post facto

research design was employed in the study. The population of the study included all

Deposit money banks quoted on the Nigerian Exchange Group (NXG) as at 31st

December 2020 with a sample size of Twelve (12) Deposit money banks selected from

the population. The study relied on secondary sources of data which was obtained from

Annual reports of sampled companies as provided by individual banks on Nigerian

Exchange Group (NXG) website. Amongst other preliminary analysis and tests, the

panel least square regression analysis was done in validating the hypotheses. The study

found that firm size and board gender diversity has a statistically significant impact on

performance.

The study recommended amongst others that there should be a reasonable mix of the

board of directors and risk committee to recognize female directors as this will have

direct impact on the firms’ image and goodwill.

26
 Wahab, Akinola and Dare (2022) examined the influence of corporate attributes

on the financial performance of listed agricultural and agro-allied companies in Nigeria.

The objectives were to explore the effects of firm age, size, liquidity and leverage on the

economic success of these firms. This study utilized panel data. The population in this

research work constituted the five agricultural firms listed in the Nigerian Exchange

Group for period of 2015-2021. This article obtained the variable data from the

companies' annual reports between 2015 and 2021. The panel regression analysis was

used. The authors established that the corporate attributes often have no appreciable

influence on Nigeria's financial performance of listed agricultural and agro-allied

enterprises. However, this research inferred that all factors about corporate

characteristics positively influenced the financial performance of agricultural and agro-

allied firms in the Nigerian financial market. It indicates a chance that these factors will

play a significant role as the companies expand their operations in the future.

Akenroye ,Adegbie, and Owolabi,(2022) investigated the effect of firms’

attributes on financial performance measures of selected listed companies in Nigeria.

The study adopted ex-post facto research design. The population of the study comprised

161 listed companies in Nigeria as at 31st December 2020. A sample size of 111 was

purposively determined for the study. Multistage techniques (stratification and quota)

were utilized in selecting the 111 firms studied. Secondary data extracted from the

published audited financial statements for 10-year period (2011–2020) were used for the

study. Descriptive and inferential (multiple regression) statistics were employed to

analyze the data. Findings revealed that firms’ attributes had joint significant effect on

both Net Profit Margin and Capital Employed Performance. The study concluded that

firms’ attributes drive the achievement of optimal corporate financial performance. The

27
study recommends that firms should continue to use their varied firms’ attributes to

deepen their financial performance growth

Saria and Sedana (2020) determine the effect of profitability and liquidity on

firm value and determine the role of capital structure in mediating the effect of

profitability and liquidity on firm value in the construction and building sub-sector

companies listed on the Indonesia Stock Exchange (IDX) for the period 2013-2017. The

population of this study are all the construction and building sub-sector companies that

are listed on the Indonesia Stock Exchange and have complete financial statements for

the period 2013-2017. The data analysis technique used is path analysis. Profitability has

a positive and significant effect on capital structure, Liquidity has a negative and

significant effect on capital structure, capital structure has a positive and significant

effect on firm value, profitability has a positive and significant effect on firm value,

liquidity has a negative and not significant effect on firm value and capital structure is

able to mediate the effect of profitability and liquidity on firm value.

Dioha et al (2018) examined the effect of firm characteristics on profitability in

Nigeria. The sample consisted of 18 listed consumer goods companies for the period

2011–2016. Profitability was proxied by ROS, while firm characteristics were proxied by

firm age, firm size, sales growth, liquidity and leverage. Multiple regression was used to

analyze the data. The study found that size, sales growth and leverage have significant

effect on profitability. However, age and liquidity were not significant.

28
 CHAPTER THREE
METHODOLOGY

This chapter basically deals with the procedures and different methods to be

employed in carrying out the research. It is concerned with the procedure to be adopted

in the research design, sampling, method of data collection and method of data analysis

to enable required information to be conveyed.

3.1 Research Design

This study will employ ex post facto research design to achieve the objectives of the

study. This research design is preferred for this study due to the nature of the data to be

used for the analysis of the study. In particular, the data is expected to be used is already

in existence. This most appropriate for this study because it allows for testing of

expected relationships between and among the variables and the making of predictions

regarding these relationships when the data have both unit and time dimensions. The

study seeks to measure of a dependent variable of market value proxy as (Tobins q), and

three independent variables liquidity, leverage and profitability among listed consumer

goods firms over a period of 10 years from 2012 to 2021.

3.2 Population of the Study

The population of the study will consists of 21 listed consumer goods firms on Nigerian

Exchange Group (NGX). Table 3.1 contains a list of the consumer products companies

that are mentioned in the NGX's official record.

Table 3.1 Listed Consumer-Goods Companies

S/N Company Name Year of Listing

1. Cadbury Nigeria Plc 1976
2. Champion Brewery Plc 1983
3. Dangote Sugar Refinery Plc 2007

29
 4. DN Tyre & Rubber Plc 1961
5. Flour Mills Nigeria Plc 1979
6. Golden Guinea Brewery Plc 1979
7. Guiness Nigeria Plc 1965
8. Honeywell Flour Mills Plc 2009
9. International Brewery Plc 1994
10. McNicholsPlc 2009
11. Multi-Trex Integrated Foods Plc 2010
12. Nigeria Flour Mills Plc 1978
13. Nascon Allied Industries Plc 1992
14. Nestle Nigeria Plc 1979
15. Nigerian Breweries Plc 1973
16. Nigerian Enamelware Plc 1979
17. P.Z Cussons Nigeria Plc 1972
18. Unilever Nigeria Plc 1973
19. Union Dicon Salt Plc 1993
20. Vita Foam Nigeria Plc 1962
21. BUA foods 2022
Source: www.nse.com.ng. https://ngxgroup.com accessed on February 2022

3.3 Sample size and Sampling Techniques

Out of 21 listed consumer goods firms in Nigeria, Ten (10) was selected as a

sample size using purposive sampling technique. Firms with complete financial

statement and whose shares are actively traded on stock exchange market and

consistently published their annual reports for the period of investigation were selected.

The period of the study covered eleven (10) years between 2012 and 2021.

3.4 Method of Data Collection

30
 The required data for achieving the objectives of the study was gathered from

secondary source. Secondary data covering information on current asset, current

liabilities, net income, total assets, total liabilities and total equity were extracted from

the audited annual financial reports and accounts of 10 sampled firm and Nigerian

Exchange Fact-book.

3.6 Measurement of Variables

Table 3.3: Summary of Measurement variables

Variables Type Variab Measurement Expected

of Variable le Sign
Labels
Tobins Q Dependent TQ Tobin’s Q is the sum of
the market value of
firm’s stock and the
book value of debt
dividedby the book value
of its total assets
Liquidity Independent LIQ Ratio of current asset to ±
current liability
Leverage Independent LEVE Total debt ±
Equity
Profitability Independent PROF Ratio of net income to ±
total asset
Source: Author’s Compilation, 2023

3.7 Model Specification

For the purpose of measuring the relationship between dependent and

independent variables, an econometric model adapted from the previous related work

(Akenroye, et al, 2022). The specification will reflect each of the objectives to be

achieved through both functional and econometric forms.

TQ=f ( LIQ , LEV , ROA , ) 3.1

TQ ¿ =β 0+ β1 LIQ¿ + β 2 LEV ¿ + β 3 ROA ¿ + ε ¿ 3.2

Where

31
β 0is intercept,

β 1- β 4 are estimated coefficients for model

TQ = Tobins q

LIQ =Liquidity

ROA=Return on Assets

LEV= Leverage

FSI= Firm Size

ε = Error terms

i = firm

t = time

3.8 Methods of Data Analysis

Data collected on the all variables was analyzed using descriptive and inferential

statistics. The descriptive statistics used in the study are measures of central tendency

such as mean, maximum and minimum, and measure of variability such as standard

deviation, skewness and kurtosis. The inferential statistics adopted were correlation and

ordinary least square static panel.

CHAPTER FOUR

DATA PRESENTATION, ANALYSIS AND INTERPRETATION

32
This chapter shows the presentation, analysis and interpretation of the data collected and

analysed for the purpose of achieving the objectives of the study. The results obtained

were presented below in accordance with the objectives of the study

4.1 Descriptive Statistics

Table 4.1 revealed the output of the descriptive statistics of both the dependent and the

independent variables. The mean of the dependent variable is MKV 0.5102 with

minimum and maximum of 0.1000 and 0.7920 respectively. The independent variable

was proxied with liquidity (LIQ) leverage (LEV) and Profitability (PROF). LIQ has a

mean of 1.1863 with minimum of 1.1010 and maximum values of 2.0670. This implies

that the liquidity of the sampled firms was good during the period of study. The mean of

leverage stood at 0.7777 with minimum of 0.4537 and maximum of 0.8172. This shows

that the sampled firms operations are majorly financed by debt. The average of

profitability for the study period was just 0.0628 with -0.0983 and 0.1658 as minimum

and maximum values respectively. This indicates that the profitability of sampled firms

was very poor during the period of study.

Table 1 Descriptive Statistics

MKV LIQ PROF LEV
Mean 0.5102 1.1863 0.0628 0.7777
Median 1.0000 1.5811 0.0779 0.7433
Maximum 0.7920 2.0670 0.1658 0.8172
Minimum 0.1000 1.1010 -0.0983 0.4537
Std. Dev. 2.5620 0.3526 0.1013 0.2377
Skewness 2.6666 0.1906 -1.8012 0.4472
Kurtosis 8.1111 1.6618 5.6398 1.7215
Jarque-Bera 22.736 0.8066 8.3110 1.0143
Probability 0.0012 0.6680 0.0156 0.6021
Sum 18.102 15.863 0.6284 7.7774
Sum Sq. Dev. 59.078 1.1189 0.0923 0.5087
Observations 100 100 100 100
Source: Author’s Computation, 2023

4.2 Pearson Correlation Analysis

33
The main reason for carrying out correlation analysis is to determine the degree of

association between the variables and also know whether there is any issue of

multicollinearity among the variables on interest. Correlation test explain in details the

extent of relationship most especially among the independent variables vis a vis their

relationship with the dependent variable. Existence of collinearity is capable of distorting

the real picture of the relationship among the variable of interest. Result as depicted in

table 4.2 shows there is no multicollinearity among the variables

Table 2 Correlation Matrix

MKV LIQ PROF LEV
MKV 1.0000
LIQ 0.4760 1.0000
PROF 0.1802 0.5206 1.0000
LEV -0.3723 -0.9348 -0.5337 1.0000
Source: Author’s Computation, 2023

4.3 Regression Result

Discussion of findings of influence of Corporate Attributes on Return on Asset

Table 4.3 showed the output of the estimation obtained from equation 2. The model was

estimated with the aid of pooled ordinary least square (OLS) using 10 listed consumer

goods firms from 2012 to 2021. The table showed that explanatory variables (LIQ, LEV,

PROF) explained 77% variation in MKV. The remaining 23% unexplained were

attributed to other relevant variables not included in the model. The result showed that

LIQ and LEV had positive and significant effect on MKV with (Coeff = 0.1450, p<0.05)

and (Coeff = 0.0908, p<0.05) respectively. The positive effects of corporate attributes on

MKV implies that a unit increase in firms liquidity will lead to 14% rise in its market

value while a unit increase in leverage will also lead to improvement in the market value

of the sampled firms.

34
Table 3 Regression Analysis
Dependent Variable: MKV
Method: Least Squares
Included observations: 100

Variable Coefficient Std. Error t-Statistic Prob.

C -14.578 19.28974 -0.7557 0.4784

LIQ 0.1450 7.154531 1.0414 0.0378
PROF -1.4399 10.45231 -0.1377 0.8949
LEV 0.0908 10.71229 0.5592 0.0526

R-squared 0.770894 Mean dependent var 1.810200

Adjusted R-squared 0.743659 S.D. dependent var 2.562077
S.E. of regression 2.679373 Akaike info criterion 5.098217
Sum squared resid 43.07423 Schwarz criterion 5.219251
Log likelihood -21.49108 Hannan-Quinn criter. 4.965443
F-statistic 1.743086 Durbin-Watson stat 2.039523
Prob(F-statistic) 0.051423

Source: Author’s Computation, 2023

4.4 Discussion of findings of Corporate Attributes on Firm market value

The independent variables of the company qualities were regressed on the firm market

value in the study. Using liquidity, leverage and profitability as proxies of firm attributes

while tobins’q was employed as the variable to measure market value. To accomplish

the study's goals, the model that was specified was analysed using ordinary least square

method. The results show that liquidity and leverage were positively and significantly

associated with market value. According to the regression line, MKV = -14.578 + 0.1452

LIQ -1.4399+ 0.0908 LEV. This indicates that for every unit increase in liquidity (LIQ),

MKV will rise by 14%. The regression line also demonstrates that for every unit increase

in leverage (LEV), MKV will increase by 9%. As a result, the findings as shown in table

4.3 demonstrate that increasing debt levels within reasonable threshold will result in

improvement in the market value of consumer goods firms. Finally, the results further

demonstrated that liquidity had a positive and significant influence on MKV, indicating

35
that firms must ensure they are always liquid in order to maintain a steady earnings

growth trend and meet and exceed earnings expectations.

CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATIONS
36
5.1 Summary of Findings
This study main objective is the relationship between corporate attributes and market

value of listed consumer goods producing firms in Nigeria. To achieve the main

objective, three objectives were tested which are: determine the influence of liquidity

market value of consumer goods firms in Nigeria, examine the effect of leverage on

market value of consumer goods firms and investigate the impact profitability on market

value of consumer goods firms in Nigeria. The findings reveal that there is positive and

significant relationship between LIQ, LEV and MKV.

5.2 Conclusion

The study used secondary data obtained from the annual reports of the companies

selected from 2012 to 2021. Data were collected on variables such current asset, current

liabilities, net income, total assets, total liabilities and total equity. The study’s finding

revealed that corporate attributes variables have effect on MKV

5.3 Recommendations

Based on the findings and conclusion of the study, the following recommendations are

made:

1. Listed consumer goods firms policy maker should formulate policies that will

guarantee their liquidity at all time to guide against cash shortage in order to

improve their market value

2. The management should encourage usage of moderate and reasonable debt in

their capital structure since there is a favourable impact of debt on their market as

revealed by the result

37
 3. The sampled company should engage in productive activities and project that has

positive net present value to improve their profitability and thereby increase their

market value.

5.4 Limitation

The variables focused on the few corporate attributes alone. There are other relevant

corporate attributes not considered in this study. Even though it was possible to make

generalization based on the outcome of the findings, other variables not included may

have made a difference.

5.5 Suggestion for Further Studies

Future researchers should consider other sectors and other corporate attributes.

38