This study examines the determinants of firm performance of New Zealand listed companies over the period of 1996-2007 during which one recession occurred. I explore a number of performance proxies such as Return on Assets (ROA), economic profit (EP) and Tobin’s Q in relation to firm characteristics to see what factors determine firm performance. In addition I examine the question of whether the importance of these factors changes depending on the state of the economy. The regression model encompassed eight key factors that have been found to have the most impact on the operating performance of the companies in other markets. These factors are; intangibles, corporate governance, cash on hand, leverage, firm specific risk, size, growth and tangibility. The results have supported previous studies’ findings to some extent, with size being the most important factor determining firm performance, followed by growth and leverage with the weaker relationships. Other factors appeared to be marginally related to the operating performance at different significance levels.