Effects of Debt Financing on Financial Performance of Listed

Consumer Good Firms in Nigeria

INTRODUCTION
● It is published in September 2021 by Arumona
●Financing decision is majorly concerned with how organisations source for funds to carry-out its
investment needs.
IDENTIFYING GAPS
●If we talk about the current scenario of debt financing showed that for some SMEs, debt finance
improved the level of productivity.
●There has been yearning among academics, government, financial institutions regulators and
global institutions as to whether debt influences the financial performance of an organization.
LITERATURE REVIEW
Conceptual Framework
●Debt Financing
●Short-Term Debt
●Financial Performance
Empirical Review -Asian and Diette-Abayeh (2019), examined the capital structure composition and
financial performance of food and beverage firms, using Secondary data obtained from the Nigeria
Stock Exchange. The objective of the study was to examine how capital structure composition
affects financial performance of Food and Beverage firms quoted on Nigeria Stock Exchange. 1
Ramaiah University of Applied Sciences
 Effects of Debt Financing on Financial Performance of Listed Consumer Good Firms in
Nigeria Continued….
SCOPE FOR FURTHER RESEARCH
● Financing decisions, especially debt financing, have been revealed to have noteworthy
implications for the operations of corporation.
●Studies on finance have revolved around the theory that certain financial policies, like debt
financing, should either boost or hamper a corporation’s competitive performance
METHODOLOGY-This study adopted the use of longitudinal survey. The longitudinal survey or panel
study was chosen by the researcher as it aims at describing patterns of change in order to establish
relationship between independent and dependent variables.
VARIABLES -Net Profit Margin ,Short-Term Debt, Firm Size ,Firm Age
RESEARCH DESIGN- TheCase study research design is suitable for extensive research, rapid data
collection, and ability to understand the population.The study employed random sampling
technique to arrive at the sample size of the study. The secondary data was used in the study
STATISTICAL ANALYSIS- Descriptive results, hyphothesis testing , Corelation matrix
OBSERVATIONS -
●From This Case study it is established that short term debt has a negative and significant effect on
net profit margin.
● It concludes that the ratio of short-term debt should not be too much so as to avoid reduction in
the value of net profit margin.
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Ramaiah University of Applied Sciences