Financial Leverage Behaviour and Firm Performance: Evidence from Publicly Quoted Companies in Nigeria
This paper scrutinizes financial leverage behaviour and firm performance of publicly quoted companies in Nigeria. Data of Leverage, Profitability and Firm Size were sourced from the Nigerian Stock Exchange Fact-book and Annual Report and Accounts of 120 publicly quoted companies in Nigeria during...
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| Format: | Article |
| Language: | English |
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Danubius University
2014-08-01
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| Series: | Acta Universitatis Danubius: Oeconomica |
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| Online Access: | http://journals.univ-danubius.ro/index.php/oeconomica/article/view/2416/2182 |
| Summary: | This paper scrutinizes financial leverage behaviour and firm performance of publicly
quoted companies in Nigeria. Data of Leverage, Profitability and Firm Size were sourced from the
Nigerian Stock Exchange Fact-book and Annual Report and Accounts of 120 publicly quoted
companies in Nigeria during the period 1990 through 2013. Findings suggest that profitability and
firm size had a negative effect on financial leverage behaviour of publicly quoted companies in
Nigeria. Thus, it was recommended that firms should carry out projects that would help enhance size
and profitability in all aspect of the firm. Size in terms of assets would help increase the internal
funding. This in turn will have a positive impact on the financial structure of firm as more of
internally generated funds will be used instead of external borrowings. Firms should not assume that
making of profit shows good application of leverage as this was not found to be true from the
analysis. This implies that the result can be relied upon for policy direction. |
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| ISSN: | 2065-0175 2067-340X |