FINANCIAL LEVERAGE AND CASH VALUE ADDED: A STUDY OF NIGERIAN QUOTED INDUSTRIAL GOODS FIRMS

Abstract

This study ascertains the effect of financial leverage on cash value added of quoted industrial goods firms in Nigeria from 2008-2020. Panel data sets used in this study were obtained from the annual reports and accounts of thirteen (13) quoted industrial goods firms. Ex-Post Facto research design was employed. Descriptive statistics and Panel Least Square (PLS) regression analysis were applied to test the hypotheses of the study. The specific findings showed that there is a significant and positive effect between Short Term Debt Ratio and Cash Value Added, also a significant and positive effect between Long Term Debt Ratio and Cash Value Added of quoted industrial goods firms in Nigeria. the study recommended that since short term debt positively affects cash value added, industrial goods firms should use more of short-term debt in their capital structure to avoid paying a high cost of capital.