Debt Financing and Earnings of Quoted Manufacturing entities in Nigeria
Abstract
The aim of this study was to investigate how debt financing affect earnings in the quoted manufacturing entities in Nigeria. This was premised on the fact that several manufacturing entities are winding up and some of them remain dormant on the floor of Nigerian Exchange Group (NGX) Plc without making any significance progress on their earnings. Ex-post facto research design was adopted in the study. Twenty-six (26) quoted manufacturing entities in Nigerian were served as the population in this study, while the sample size of the study was seventeen (17) quoted manufacturing entities in Nigeria. This study covered the financial period of 2013-2024. Judgmental sampling technique was adopted in the study. Data were collected from the financial statements of the sample entities in Nigeria. The data collected were analyzed using descriptive and inferential statistics with the aid of E-view version 10. The results of this study revealed that, Debt Ratio, Interest Coverage Ratio and Debt -to- Equity Ratio had positive and significant influence on earnings of quoted manufacturing entities in Nigeria. It was concluded from the findings of this study that; debt financing is a good source of financing a business that entities should source for loan whenever the need arises. It was recommended by the researchers that; banks and other financial institutions should reduce their lending rate in order to maximize the organizational earnings.
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