Leverage and Profitability of Quoted Health Care Firms in Nigeria

Olaifa Oluwafemi Olumuyiwa, Yakubu Abubakar and Dangana Umaru
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Olaifa Oluwafemi Olumuyiwa: Department of Accounting, Ahmadu Bello University, Zaria, Nigeria
Yakubu Abubakar: Gbenga Olowe & Co Chartered Accountants Firm
Dangana Umaru: College of Education, Gidan Waya, Nigeria

International Journal of Research and Scientific Innovation, 2020, vol. 7, issue 2, 221-232

Abstract: Capital structure and its influence on profitability has been a major point of argument among researchers, since different research come up with divergent views to explain how relevant or irrelevant it is. This study looks at the effect of Leverage on profitability of Quoted Healthcare firms in Nigeria for a period of 10 years (2003-2012). The study employed panel data analysis by using Ordinary Least Square regression model. It was found out that leverage has a significant effect on profitability of quoted healthcare firms in Nigeria. The study concludes that leverage impact return on asset, return on investment and earnings per share negatively while it affect return on equity positively. It is recommended that management should balance the use of equity and debt in a way that will impact positively on firms value, we also added that Central Bank of Nigeria (CBN) should review and lower interest rate on bank loan so that healthcare firms can have access to cheaper capital to develop standard healthcare facilities, create more wealth and employment opportunities which in turn will affect the economy in a positive way.

Date: 2020
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