Operational Cost Control and Financial Performance of Conglomerate Firms in Nigeria

This study examines the relationship between operational cost control and
financial performance. The specific objectives are to examine the extent to which
production cost, administrative cost, and selling and distribution costs affect the
financial performance of conglomerate firms in Nigeria, using net profit margin as a
measure of financial performance of manufacturing. The ex-post facto research design
was used, which involves the use of secondary data extracted from the annual report
of the five (5) conglomerates for the relevant years under consideration (2018-2023).
The panel least squares regression techniques were employed to examine the implicit
relationship between the variables. The study found a significant effect on production
cost and selling and distribution cost. The study also finds a positive, insignificant
effect on financial performance. Based on the findings, the study therefore concludes
that there is a positive significant relationship between operational cost control and the
financial performance of consummate firms in Nigeria. The study therefore
recommends that firms should invest in technologies that streamline operations,
improve management practices, and enhance employee productivity. Therefore,
continuous monitoring and analysis of production costs should be conducted to
identify areas for improvement.