FINANCIAL LEVERAGE AND EARNINGS QUALITY OF LISTED CONSUMER GOODS ENTITIES IN NIGERIA
Keywords:
Financial Leverage, Earnings, Quality, Consumer Goods and EntitiesAbstract
The main objective of this study was to examine the influence of financial leverage on earnings quality of listed consumer goods entities in Nigeria. This study was motivated by the failure and falsification of audited financial statements done by some of the auditors and managers of listed consumer goods entities in Nigeria that resulted in the winding up of some of these entities. The design adopted in this study was Ex-post facto research design. The population of this study consists of twenty-three (23) consumer goods entities listed on the floor of Nigerian Exchange Group (NGX) Plc as at 31st December, 2023, while the sample size of the study was seventeen (17) listed consumer goods entities in Nigeria. This study covered financial period of 2013-2023. Judgmental sampling technique was adopted in the study. Data were collected from the financial statements of the sample entities in Nigeria. The data collected were analyzed using descriptive and inferential statistics with the aid of E-view version 10. Findings from the study revealed that, Debt-to-Asset Ratio, Cash Coverage Ratio and Long-Term Debt Ratio had positive and significant influence on earnings quality of listed consumer goods entities in Nigeria. It was concluded from the findings of this study that; financial leverage is a good source of funding a business investment and the expansion of the business, that entities should source for loan when they need it. The authors recommended that; Listed consumer goods entities in Nigeria should continue to embrace the use of leverage as this would aid the expansion of their investment and brings about quality of earnings in their entities
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