Effect of Risk Management on the Financial Performance of Listed Consumer Goods Firms in Nigeria

Abstract

The inability of the consumer goods industry to manage their risk and capital on all valuable investment opportunities make it impossible for them to meet up with their obligation to shareholders. Thus, the study examined the effect of risk management on the performance of listed consumer goods firms in Nigeria.Longitudinal panel research design was adopted in this study. The population of the study consists of all the twenty-seven (27) listed consumer goods firms on the Nigeria Stock Exchange as at 31st December 2021. In order to arrive at the sample size, the purposeful sampling technique was employed. As a result of the criterion ten (10) firms meet the requirement to form the sample size of the study. The study ranges from 2012 to 2021 a period of ten years. The secondary data adopted in this study were gathered from financial statements published on the Nigeria Exchange Group Plc and the individual company’s financial statements. The study employed descriptive statistics and panel regression with the help of STATA version 13. The study found that operational risk (OR) and liquidity risk (LR) has no significant effect on financial performance of listed consumer goods firm in Nigeria. The researcher concludes that risk management indicators used doesn’t have significant effect on financial performance indicator of listed consumer goods firms in Nigeria. The study recommends that the CBN and other regulatory bodies should encourage risk identification, assessment, measurement and control strategies to avoid financial crisis and also improve on consumer goods firm’s performance in Nigeria.