IIARD International Institute of Academic Research and Development

WORLD JOURNAL OF FINANCE AND INVESTMENT RESEARCH (WJFIR )

E-ISSN 2550-7125
P-ISSN 2682-5902
VOL. 8 NO. 4 2024
DOI: 10.56201/wjfir.v8.no4.2024.pg19.53

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Effect of Lease Financing on the Corporate Financial Performance of Quoted Non-Financial Companies in Nigeria

Onyenenue, Donatus Ejoh, Ndifon Ojong, PhD.

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Abstract

The study determined the effect of lease financing on the corporate financial performance of quoted non-financial companies in Nigeria. The specific objective was to examine the effect of operating leases and capital leases on the return on assets of quoted non-financial companies in Nigeria. Ex-post facto research design was used in the study. The population of the study comprised 63 listed non-financial firms in Nigeria. Data were collected from thirty (30) quoted companies between 2011-2020. The Panel Regression results estimated using Panel Corrected Standard Error (PCSE) revealed the following: Operating leases has significant effect on the Returns on assets (ROA) of quoted non-financial companies in Nigeria at the 0.05 significance levels; capital leases have significant effect on the Returns on assets (ROA) of quoted non- financial companies in Nigeria at the 0.05 significance levels. In conclusion, the positive effect of finance leases on ROA of Nigerian non-financial quoted companies is a result of higher contribution of leases to profits, than to assets components. The study recommends that firms should embrace operating leases financing as a method of financing their operations in order to improve operating profits, as such leases do not utilize or deplete existing working capital of firms.

keywords:

Lease Financing, Corporate Financial Performance, Operating Leases, Capital

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