|Title: EFFECT OF DEBT FINANCING ON PROFITABILITY OF LISTED AGRICULTURAL COMPANIES IN NIGERIA
FASASI, Kazeem Adeola, AHMAD, Ahmad Abayomi and NNEJIWUIHE, Franklin Chinweike
The purpose of this research was to examine the effect of debt financing on the profitability of listed agricultural companies in Nigeria. The study sample of 5 listed Agricultural companies in Nigeria on Nigeria stock exchange (NSE). Secondary data for the study was extracted from the annual report of listed agricultural firms. The data was analyzed using multivariate regression analysis and results from the study showed that long-term debt had a significant negative effect on profitability of listed agricultural companies in Nigeria. Also, the result shows that short term debt has a significant positive effect on profitability of listed agricultural companies in Nigeria. The study concluded that debt financing has effect on profitability but long-term debt in the debt financing of the agricultural companies should be kept at a moderate level to improve their profitability. The study recommends that agricultural companies should be mindful of the level of debt they incur into their businesses so as to avoid having a negative effect on profitability.
|Keywords: Agricultural businesses, Debt financing, Profitability, Long-term debt, Debt ratio.