LONG-TERM DEBT FINANCING AND OPERATING PERFORMANCE OF LISTED INDUSTRIAL GOODS FIRMS IN NIGERIA
Keywords:
Long-Term Debt Financing, Long-Term Debt to Asset Ratio, Long-Term Debt to Equity Ratio, Operating PerformanceAbstract
The study examined the effect of long-term debt financing on the operating performance of listed industrial goods firms in Nigeria. The specific objective was to ascertain the effect of long-term debt to equity ratio and long-term debt to asset ratio on the operating cashflow margin of listed industrial goods firms in Nigeria. Ex-post facto research design was used in the study. Thirteen listed industrial goods firms made up the population of the study from which a sample size of nine was selected using purposive sampling technique. Secondary data were sourced from the annual reports of the firms for thirteen, spanning 2012-2024. Test of hypotheses was carried out using panel estimated generalised least squares, which revealed that long-term debt to equity ratio has a significant and negative effect on operating cashflow margin of listed industrial goods firms in Nigeria (β = –0.043294, p = 0.0433); long-term debt to asset ratio has a positive and significant effect on operating cashflow margin of listed industrial goods firms in Nigeria (β = 0.283497, p = 0.0051). In conclusion, firms able to channel long-term borrowings into asset-backed investments or productive resources are more likely to generate sufficient cash flows to cover their operational needs. The study recommends that financial managers of listed industrial goods firms in Nigeria should reduce excessive reliance on long-term debt relative to equity as maintaining a balanced debt–equity mix will help prevent the erosion of operating cash flow margins caused by high debt servicing obligations, thereby improving the firm’s ability to fund day-to-day operations without undue strain.
Downloads
Published
Issue
Section
License
Copyright (c) 2025 Journal of Global Accounting
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
Articles submitted to JOGA should not have been published or are currently under review by another Journal. Kindly see the guide for the preparation of the manuscript for details. Successful submission of articles by author(s) for publication clearly implies that the work is not an infringement of any existing copyright warranty as JOGA reserves the right to be indemnified by the author(s) where any breach of such warranty is proven. For ease of dissemination and to ensure proper policing of use, papers and contributions become the legal copyright of JOGA once published unless otherwise agreed.
Permission clearance should be obtained by the author(s) where applicable for the use of any content of interest not originally created by them. This must be done before the submission of the article to JOGA. Failure to do so may lead to a lengthy delay in publication, as JOGA is unable to publish any article which has permissions pending. Thus, the rights JOGA requires are:
- Non-exclusive right to reproduce the material in the article or book chapters.
- Print and electronic rights.
- To use the material for the life of the work (for instance, there should be no time restrictions on the re-use of material).
Where tables, figures or excerpts of more than 250 words are reproduced from another source, it is expected that:
- Author(s) should obtain the necessary written permission in advance from any third-party owner of the copyright for the use in print and electronic formats of any of their text, illustrations, graphics, or other material in their manuscript. Permission must also be cleared for any minor adaptations of any work not originally created by the author(s). The author (s) should not assume that any content freely available on the web is free to use.
- Where the author adapts a significant number of any material, the author(s) must inform the copyright holder of the original work.
- Author obtains any proof of consent statements
- The author must acknowledge figure(s) and content adopted or adapted in work utilizing source(s) and further capture them in the list of references.
