The Impact Of Financial Leverage On Performance Of Manufacturing Firms In Nigeria (A Case Study Of Nestle Nigeria Plc)

ABSTRACT

 The aim of this topic "The impact of Financial Leverage on the Performance of Manufacturing Firm in Nigeria", A case study of Nestle Nigeria PLC over the period of (2000-2008) is to investigate the impact of financial leverage on the performance of manufacturing firm in Nigeria. In addressing our mind to this the introduction part of this paper described what will constitute a firm's financial leverage in the context of the paper. It also mentioned that there is an identifiable relationship that exist between the nature and volume of Irm financial leverage and its performance (earning per share). On testing the hypothesis, (we found that there is statistical significant relationship 'between optimal level of financial leverage and performance of manufficturing firms.Also that there is no significant relationship between optimaI"financial leverage, shareholders return and risk. Data were collected from the annual financial reports of Nestle Nigeria PLC for nine years (2000-2008) and multiple regression analysis was used to, analyse. The result was tested using correlation - coefficient test. Finally based on the analysis and findings it is recommended that Nigeria manufacturing firms should be encourage with incentive to enable them use a reasonable proportion of debt capital and should not limit themselves to any particular capital structure in planning their capital structure. It is also recommended that the financial manger should consider those other factors that might influence their performance e in planning their business.