How does the firm size impact its financial performance?

In the energy sector, the size of companies is considered to be an important factor determining financial performance. Large energy companies often benefit from the economies of scale and scope and can invest more in research and development. However, the relationship between the size of the company and its financial performance is complex and multifaceted. The size of the company, defined as the measurement of company’s scale based on variables as Total Assets and Total Liabilities, has been recognized as a key factor in the determination of financial performance. The study uses regression analysis on data collected between 2000 and 2022 from six companies in the energy sector and aims to investigate the link between the firm size and financial performance. Financial performance is measured by ROA and ROE, among others. The study concluded that while the size of companies is an important factor in determining financial performance, it should be considered in addition to other factors.