Effect of Financial Leverage on Financial Performance of Listed Consumer Goods Firms in Nigeria

Abstract

This study examined the effect of financial leverage on financial performance of listed consumer goods firms in Nigeria. Data were collected from audited annual reports and accounts of 8 listed industrial goods firms in Nigeria from 2013-2022. Ex-post facto (after-the-fact) research design was adopted. Data were analyzed using Random Effect Regression. Results indicated that debt-equity ratio and long term debt ratio hade had significant negative effect on financial performance while short term debt ratio had negative insignificant effect on financial performance. Over all, the study found that financial leverage has negative effect on cash value added of listed industrial goods firms in Nigeria. Recommendations are also made.