FINANCIAL LEVERAGE AND FINANCIAL PERFORMANCE OF LISTED FAST-MOVING CONSUMER GOODS (FMCG) AND LOGISTICS COMPANIES IN NIGERIA

Abstract

This study examined and compares the impact of financial leverage on the financial performance of listed Fast-Moving Consumer Goods (FMCG) and Logistics companies in Nigeria over a ten-year period from 2014 to 2023. Utilizing an ex-post facto research design, the analysis focuses on two key financial leverage ratios: Debt-Equity Ratio (DE), Solvency Ratio (SR), with Return on Equity (ROE) serving as the dependent variable to measure financial performance. Panel data were analyzed using a fixed effect model to control for individual firm-specific factors and to capture variations within the data. The results showed that DE has a significant positive impact on ROE for FMCG companies; The SR negatively affects performance in FMCG firms but has no significant effect in logistics firms. The study suggested that firms in these industries should optimize their capital structures to enhance financial performance