PROFITABILITY AND LEVERAGE: EVIDENCE FROM NIGERIAN FIRMS

Olayinka Akinlo and Taiwo Asaolu

Global Journal of Business Research, 2012, vol. 6, issue 1, 17-25

Abstract: This study examines the profit profile of firms in Nigeria and analyzes the impact of leverage on profitability for the period 1999-2007. The results show that aggregate profit level for the firms decreased by 0.02 percent yearly over the study period. However, when disaggregated into sectors, a few firms actually experienced an increased profit level. The results show that firm size has a significant positive effect on profitability, while leverage has negative effect. The paper suggests that expansion, increased sales and low debt ratios enhance firm profitability.

Keywords: Profitability; leverage (search for similar items in EconPapers)
JEL-codes: G32 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (11)

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