LEVERAGE RATIOS AND FINANCIAL PERFORMANCE OF LISTED INSURANCE FIRMS IN NIGERIA

Abstract

The study examined the Leverage ratio and financial performance of listed insurance firms in Nigeria within the period 2013 to 2020, and Census is applied to employ all 25 insurance firms however filter sampling techniques are used to select 15 listed insurance firms based on the availability of data within the period of study. Data were extracted from the published annual reports and accounts of the insurance firms understudy, multiple regression analysis using STATA 13 version was employed to analyzing the data and testing the formulated hypotheses. The results suggest that debt to equity ratio, interest coverage ratio, and debt ratio have a significant impact on the financial performance (ROA), The study concludes that financial leverage has a positive and significant impact on the financial performance (ROA) of listed insurance firms in Nigeria during the period of the study. The findings, therefore recommend that the quoted insurance firms in Nigeria should improve their financial performance through careful use of financial leverage ratios and the Government should encourage firms by formulating policies that will guard against the cost of acquiring debt.