| Summary, etc |
The oil and gas sector is extremely capital intensive and highly leveraged in terms of the logistics and capital expenditures needed, such as the acquisition of assets and the technicalities involved.. Hence, this study investigated the effect of debt financing on the financial performance of listed oil and gas companies in Nigeria. Financial performance was measured by return on equity, return<br/>on assets, and Q-Ratio. Debt financing was represented by financial leverage, interest coverage ratio, long-term debt, and short-term debt. Firm size was taken as a control variable. The study adopted an ex-post facto research design and explored panel data methodology involving the collection of secondary data from seven listed oil and gas companies in Nigeria over a period of<br/>15 years between 2007 and 2021. The 105 observations obtained were subjected to descriptive and inferential statistical analysis. Mean and standard deviation were employed for descriptive statistics, while multiple linear regression was explored for inferential statistics. The results of the study revealed that financial leverage (Beta = -0.634, Sig. = 0.000, p-value = 0.05) has a negative<br/>and significant effect on return on equity, and interest coverage ratio (Beta = 0.239, Sig. = 0.020,p-value = 0.05) has a positive and significant effect on return on assets. Further findings revealed that long-term debt (Beta = 0.339, Sig. = 0.009, p-value = 0.05) and short-term debt (Beta = 0.755, Sig. = 0.002, p-value = 0.05) have a positive and significant effect on Q-Ratio. Consequently, the<br/>study concluded that debt financing has a significant effect on the various measures of the financial performance of listed oil and gas companies in Nigeria. The study recommended that the management of listed oil and gas companies in Nigeria should balance the use of both short-term and long-term debts and balance the use of both debt and equity in their capital structure to the<br/>best advantage of both shareholders and debenture holders. keywords: Debt financing, financial leverage, financial performance, interest coverage ratio, long-term debt. |
