IIARD International Institute of Academic Research and Development

IIARD INTERNATIONAL JOURNAL OF BANKING AND FINANCE RESEARCH (IJBFR )

E-ISSN 2695-1886
P-ISSN 2672-4979
VOL. 6 NO. 3 2020

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Effect of Financing Mix on Financial Performance of Health Care Firms in Nigeria

Omaliko Emeka L. M.Sc, AMNIM, AIPMA, PDE

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Abstract

This work empirically investigated the effect of financing mix on financial performance of firms. The study is vital as it portrays the extent to which financing mix influences firms’ performance. In order to determine the relationship between financing mix and firm’s performance, some key proxy variables were used in the study, namely Equity Financing, Debt Financing, Debt Equity Financing and Preferred Stock Financing; firms’ performance is however represented by ROE. Four hypotheses were formulated to guide the investigation and the statistical test of parameter estimates was conducted using multiple regression model. The research design used is Ex Post Facto design and data for the study were obtained from the published annual financial reports of the entire 9 firms listed under health care sector of NSE with data spanning from 2014-2018. The findings generally indicate that equity financing, debt financing and debt equity financing have significantly influenced firms’ performance. Preferred stock financing was found negatively and insignificantly related with firms’ performance. Based on this, the study concludes that financing mix of firms have exerted significant influence on firms performance over the years. The study however suggests that firms should always thrive to attain that optimal mix in order to achieve the overall objective of the organization

keywords:

Financing Mix; Financial Performance; Equity Financing; Debt Financing; Debt- Equity Financing

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