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EFFECT OF FINANCIAL LEVERAGE ON THE PERFORMANCE OF LISTED HEALTH CARE COMPANIES IN NIGERIA
(Accounting Department, Nasarawa State University, Keffi, 2017-03-09) Abdulsalami, Zainab
Financial leverage refers to the use of debt in financing firm operations in order to maximize profit and shareholders’ wealth, but this position has drawn attention of scholars of how various debt components really affect performance of a firm. This study examined the effect of debt components on the financial performance of ten(10) listed Health care companies in Nigeria as the population of this study, covering ten years study period from 2008 – 2017. The study made use of ex-post facto research design, secondary data and fixed effect model census sampling technique and panel regression model (ordinary least square) with aid of E-view 9 to analyze the data. The study found out that Previous Year Long Term Debt (PYLTD) was not significantand have positive effect on performance ofhealth care companies in Nigeria, but Current Year Short Term Debt (CYSTD) was significant and have positive effect on their performance. While interests charge (IC) is the most significant among the debt components and had positive effect on the performance of health care companies in Nigeria. Management of healthcare companies in Nigeria should make use of reasonablelevel of long term debt to ensure profitability and should maintain a favourable short term debt volume to trade and low interest per gain.