Debt Financing and Performance of Quoted Companies in Nigeria

This study focused on debt financing and performance of quoted companies in Nigeria. The specific objectives of the study were to examine the influence of long-term debt on the profitability of quoted companies in Nigeria. Secondly, investigated the impact of short term debt on the profitability of quoted companies in Nigeria. Thirdly, the study examined the impact total debt on the profitability of quoted companies in Nigeria. The study employed ex-post facto as the research design. The study adopted Conoil Nig Plc, Cadbury Nig. Plc and First Bank Nig. Plc as the sample size. Secondary data were sought from the annual reports and financial statements of the selected companies. E-View was used as the statistical tool. Descriptive statistic was used to analyze the mean, medians, and other descriptive result of each identified variables in the study. Ordinary Least Square (OLS) was used as the method of data analysis to tested research hypotheses at the 5% level of significant. The study found that long-term debt ratio has significant relationship with profitability of quoted companies in Nigeria. Furthermore, it was discovered that the relationship between short term debt and profitability of quoted companies is statistically significant. Finally, the study revealed that there is significant relationship between total debt ratio and profitability of quoted companies in Nigeria. Based on these findings, the study concluded that debt financing has significant effect on the profitability of quoted companies in Nigeria. The study recommends that firms should rely less on short-term debt, which forms the major part of their leverage, and focus more on developing internal strategies that can help improve their accounting performance as their performance for the period studied was very low.