Debt Financing Measures and Financial Performance of Listed Industrial Goods Manufacturing Firms In Nigeria


  • Geoffrey Alagha Department of Accounting, University Of Port Harcourt, Choba
  • Ebere, Chukwuma Christopher Departments Of Accounting, University Of Port Harcourt, Choba


Short-term debt financing, long-term debt financing, total debt financing, net profit margin, returns on assets, industrial goods manufacturing industry


This research paper investigated the relationship between debt financing measures and financial performance of listed industrial goods manufacturing firms in Nigeria. The research adopted the ex post facto design. A sample of seventeen (17) companies in the industry were selected and data collected for a period of ten (10) spanning 2010 to 2019. Data was collected from the audited annual financial statements of the sample companies. Data for the research consisted of those on debt financing measured in terms of short-term debt (STD); long-term debt (LTD), and total debt (TDT) financing. Financial performance was measured using return on assets (ROA) and net profit margin (NPM while firm size (FSZE) and firm age (FAGE) were included as moderating variables. After a series of preliminary and diagnostic tests - including ADF unit root test, and Hausman test - the Random Effects Model (REM) and system specified panel Estimated Generalized Least Squares (EGLS) method was selected as the appropriate technique for data analyses and test of hypotheses. The findings of the research revealed that: there is a non-significant positive relationship between short-term, and long-term debt financing and net profit margin; a negative and non-significant relationship between short-term and long-term debt financing and return on assets; a negative and significant relationship between total debt financing and net profit margin; and a positive and non-significant relationship between total debt financing and return on assets.The research thus concluded that debt financing has minimal effect on financial performance. It is thus recommended that managers need to acquire better knowledge on the optimal use of debt financing; companies desirous of extensively using debt financing must first shore-up their capital base. Finally, companies should ensure that they have viable investment options before applying for loan facilities.


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How to Cite

Alagha, G. ., & Christopher, E. C. . (2023). Debt Financing Measures and Financial Performance of Listed Industrial Goods Manufacturing Firms In Nigeria. Academic Journal of Digital Economics and Stability, 28, 64–78. Retrieved from