Assessing the Effects of Macroeconomic Factors on the Financial Performance of Ghanaian Listed Manufacturing Companies

This study used data from a specific era to analyze the macroeconomic factors of financial success in Ghana's listed manufacturing enterprises. Using secondary data, the study investigates how inflation, exchange rate variations, Gross Domestic Product (GDP) growth rates, and interest rate changes affect key financial measures, notably Return on Equity (ROE) and Return on Assets (ROA). The findings show that, whereas exchange rate fluctuations have a major impact on financial performance, inflation, GDP growth rates, and interest rate changes do not have the same impact on the financial performance of the manufacturing firms listed on the Ghana Stock Exchange. Firm size emerges as a significant moderator, influencing the complex linkages between macroeconomic variables and financial results of the listed manufacturing firms. The regression models show impressive goodness-of-fit, as evidenced by high R-squared values, low standard errors of regression, and positive log likelihood. Despite the fact that inflation had no statistically significant impact on the listed manufacturing companies' profitability, we advise that the firms keep an eye on both domestic and international inflation to comprehend its indirect effects on pricing and costs and to provide guidance for their financial management. We also advise specific risk management measures for currency fluctuations, in-depth analysis of inflation dynamics, and continual monitoring of macroeconomic data for manufacturing enterprises. We suggest that future studies should compare manufacturing industries and economic cycles to better understand the impact of technology, trade dynamics, and government policies on manufacturing firms' bottom lines. This could lead to the development of more targeted financial strategies.