Effect Of Debt Financing On Financial Performance Of Listed Consumer And Industrial Goods Firms In Nigeria

Abstract

Given the important role that debts currently play in constructing the financial structure of large companies, the notion of debt financing has gained significant prominence in recent years. The comparison between debt financing and financial performance in the debt finance literature is quite clear and implies that debt financing may have an impact on financial performance. To evaluate the effects of debt financing on financial performance of listed Consumer and Industrial goods firms in Nigeria, the data was gathered from the audited annual reports of twenty-four consumer and industrial goods firms listed in the Nigerian Exchange Group for the period of 2013 to 2022. Panel regression results showed that debt financing has a significant impact on the financial performance of listed consumer and industrial goods firms. Thus, Nigerian listed consumer and industrial products companies must weigh the advantages of debt against the dangers of bankruptcy in order to maintain the traditional benefit of leverage ratios.