FINANCIAL LEVERAGE AND FINANCIAL PERFORMANCE OF LISTED FAST-MOVING CONSUMER GOODS AND LOGISTIC COMPANIES IN NIGERIA A COMPARATIVE ANALYSIS

https://doi.org/10.5281/zenodo.14973490

Authors

  • Bright Moses Oseni Department of Accounting, Wellspring University, Benin city, Nigeria
  • Gina Oghogho Olufemi Department of Accounting, Wellspring University, Benin city, Nigeria

Keywords:

Financial Leverage, Financial Performance, FMCG, Logistics, Debt-to-Equity Ratio, Return on Equity

Abstract

This study explores the impact of financial leverage on the financial performance of listed Fast-Moving Consumer Goods (FMCG) and logistics companies in Nigeria over the period from 2014 to 2023. By employing a fixed-effects panel regression model, this research examines how financial leverage, operationalized through the Debt-to-Equity (DE) ratio, Debt Level (DL), and Interest Coverage Ratio (ICR), influences the Return on Equity (ROE) of firms within these critical sectors. The findings reveal that the DE ratio has a significant effect on ROE, indicating that FMCG companies tend to benefit from higher leverage, whereas logistics companies often experience decreased profitability with increased debt levels. In contrast, DL and ICR were found to be statistically insignificant in affecting ROE within the sample. This highlights the nuanced role of financial leverage in different sectors and underscores the need for tailored financial strategies. Based on the findings, the study recommends that FMCG companies in Nigeria consider leveraging debt strategically to enhance profitability, while logistics companies should adopt more conservative debt management practices to mitigate risk and ensure sustainable performance. Furthermore, the research suggests that firms in both sectors should strengthen their financial risk management frameworks to better navigate the complexities of leverage.

Published

2025-01-10

How to Cite

Moses Oseni, B., & Olufemi, G. O. (2025). FINANCIAL LEVERAGE AND FINANCIAL PERFORMANCE OF LISTED FAST-MOVING CONSUMER GOODS AND LOGISTIC COMPANIES IN NIGERIA A COMPARATIVE ANALYSIS. SADI International Journal of Management and Accounting (SIJMA), 12(1), 11–28. https://doi.org/10.5281/zenodo.14973490

Issue

Vol. 12 No. 1 (2025): January-March

Section

Original Peer Review Articles
Copyright & Licensing

Copyright (c) 2025 SADI International Journal of Management and Accounting (SIJMA)

Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.

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