FIRM PHYSIOGNOMIES AND FINANCIAL DISTRESS: EVIDENCE FROM LISTED CONSUMER GOODS FIRMS ON THE NIGERIAN EXCHANGE GROUP

Abstract

This study considers how firm-specific characteristics such as firm size, liquidity, and profitability influence the financial distress of listed consumer goods firms on the Nigerian Exchange Group. This study used the Altman Z-Score model as a proxy for financial stability in conveying an idea of the financial robustness of the sector amidst the fluctuating economy of Nigeria. The results of panel data analysis, which covered the period from 2012 to 2023 for 16 Consumer Goods Firms, indicated that firm size and liquidity have a significant positive effect on financial stability; large and liquid firms demonstrate lower probabilities of distress. Profitability also had a positive effect on financial stability but with a smaller effect size. These findings underscore the critical role that firm physiognomies play in enhancing resilience against financial distress and point toward strategies that should emphasize the management of an increase in firm scale, liquidity management, and a focus on long-term profitability with a view to fostering financial stability.