Monetary Policy and Financial Performance of Consumer Goods Manufacturing Firms: Evidence from Flour Mills Nigeria Plc

This study examines the effect of monetary policy on the financial performance of Flour Mills Nigeria plc using an annual dataset from 1990 to 2021. The financial performance is measured as return on assets while monetary policy is a proxy by monetary policy rate. Other control variables in the model are exchange rate, inflation rate and managerial efficiency. In the estimation, this study employed the autoregressive distributed lag (ARDL) model. The results of this study reveal that monetary policy has a significant negative effect on the financial performance of flour mills plc while the exchange rate and inflation rate have no significant influence on the financial performance of the company. The result further suggested that managerial efficiency has a significant positive effect on the financial performance of the sampled firm. According to the results, this study recommended that monetary authorities should cut down the monetary policy rate. The foregoing will serve as an incentive for the company to increase its production operation and in the long will help to boost output and financial performance. Finally, the study recommends the need for the company to strengthen its efforts in improving managerial efficiency because of its positive influence on financial performance.