Effect of Leverage on the Profitability of Nigerian Consumer Goods Manufacturing Firms
Effect of Leverage on the Profitability of Nigerian Consumer Goods Manufacturing Firms
Author(s): Abdul-Azeez Adeniyi Alao, Wasiu Abiodun SanyaoluSubject(s): Economy, National Economy, Business Economy / Management
Published by: Икономически университет - Варна
Keywords: Degree of operating leverage; Degree of financial leverage; Degree of combined leverage; Earnings per Share
Summary/Abstract: This study examined the effect of leverage on the profitability of Nigerian manufacturing firms based on the data of seventeen (17) Nigerian consumer goods firms listed on the Nigerian Stock Exchange for the period of 2012 to 2017. The study adopted the dynamic panel model. The main finding of the study revealed that leverage has a significant positive effect on profitability with p-value of 0.0000. The study therefore recommended that companies in the Nigerian consumer goods industry should take advantage of debts’ tax shield from the interest in their financial structure in order to improve their profitability level.
Journal: Izvestiya. Journal of Varna University of Economics
- Issue Year: 64/2020
- Issue No: 1
- Page Range: 5-25
- Page Count: 21
- Language: English