This study examines the impact of indebtedness on the performance of quoted Nigerian downstream oil and gas companies. The main objective of the study is to find out whether or not indebtedness has impact on the financial performance of the quoted Nigerian downstream oil and gas companies, using Return on asset (ROA) and Return on capital employee (ROCE) as proxies to financial performance. Secondary data of 11 listed oil and gas companies on the Nigeria Stock Exchange from 2007-2019 were used in the study. The data generated were analyzed using multiple regressions to examine the relationship between the variables. Indebtedness is proxied by long term debt, short term debt and total debt, using the pooled ordinary least square, fixed effect and random effect models. After the estimation, the study found that long term debt negatively and significantly impact on the financial performance of quoted Nigerian downstream oil and gas companies. The study recommends that listed downstream oil and gas firms in Nigeria should make effective use of long term debts to enhance their capital employed with a view to generating more return on investment to cover cost of capital and increase their retained earnings.
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In-Text Citation: (Abosede, 2020)
To Cite this Article: Abosede, S. A. (2020). Impact of Indebtedness on Financial Performance of Quoted Downstream Oil and Gas Companies in Nigeria. International Journal of Academic Research in Accounting Finance and Management Sciences, 10(4), 8-21.
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