AGUZUE, SANDRA ADAEZE and Covenant University, Theses (2022) EFFECT OF DEBT FINANCING ON FINANCIAL PERFORMANCE OF FAST-MOVING CONSUMER GOODS COMPANIES IN NIGERIA. Masters thesis, COVENANT UNIVERSITY.
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Abstract
This study aimed at examining the effect of debt financing on financial performance of fast-moving consumer goods companies in Nigeria. The study established a link between some debt financial ratios, presumably debt-to-asset ratio (DAR), debt-to-capitalization ratio (DCR), and debt-to-equity ratio (DER) on financial performance of fast-moving consumer goods firms in Nigeria measured by return on assets (ROA) and sales return (ROS). The study gathered secondary data on ten listed fast-moving consumer goods companies from 2012 to 2021. Two models were drawn for the study. The dependent variables were return on assets (ROA) and sales return (ROS) while the independent variables were debt-to-asset ratio (DAR), debt-to-capitalization ratio (DCR), and debt-to-equity ratio (DER) of the selected companies. The fixed effect and the random effect regressions were conducted for both models while the Hausman test selected the random effect regression as the best fit for analysis for both models also. From the analysis, debt-to-asset ratio (DAR), debt-to-capitalization ratio (DCR), and debt-to-equity ratio (DER) were all negatively and statistically significant in impacting returns on asset (ROA). Also, debt-to-asset ratio (DAR) and debt-to-capitalization ratio (DCR) were positively and statistically significant in impacting sales returns (ROS), but debt-to-equity ratio (DER) was negatively not significant in impacting (ROS). The study therefore recommended that the consumer companies should focus on debt financing in order to improve their financial performances. This was due to the fact that debt financing ratios of debt-to-asset ratio (DAR), debt-to-capitalization ratio (DCR), and debt-to-equity ratio (DER) were significant in impacting return on assets).
| Item Type: | Thesis (Masters) |
|---|---|
| Uncontrolled Keywords: | Sales Return (ROS), Panel data regression, Debt financing, debt-to-capitalization ratio (DCR), financial performance |
| Subjects: | H Social Sciences > H Social Sciences (General) H Social Sciences > HG Finance |
| Divisions: | Faculty of Law, Arts and Social Sciences > School of Social Sciences |
| Depositing User: | AKINWUMI |
| Date Deposited: | 09 Aug 2022 10:53 |
| Last Modified: | 09 Aug 2022 10:53 |
| URI: | http://eprints.covenantuniversity.edu.ng/id/eprint/16132 |
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