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The effect of credit facilities on corporate financial performance of consumer goods firms in Nigeria

. Nwaogaidu Samuel Anenechi, Emeka Emengini Steve & John Chidubem Nwaogaidu


Abstract

The study examined the effect of credit facilities on corporate financial performance of Consumer goods firms in Nigeria. The Study specifically examined the effect of credit facilities on profit for the year, return on asset, retained earnings, turnover, return on equity and net asset of consumer goods firms in Nigeria. Data for the study were sourced from the annual reports and accounts of the sampled firms for the period of eleven years spanning through 2011 to 2021, the collected data were analyzed using multiple regression analysis, result of the analysis showed that credit facilities had significant and positive effect on profit for the year of the sampled Consumer goods firms in Nigeria. The result indicated that profit for the year of Consumer goods firms in Nigeria was influenced by credit facilities. It was also observed that the effect of credit facilities on return on asset of Consumer goods firms in Nigeria is significant and positive. Result of the analysis showed that retained earnings of Consumer goods firms in Nigeria were influenced by credit facilities, and the extent of the influence exerted is significant and positive. The study further revealed that credit facilities had significant and positive effect while size had an insignificant effect on turnover of the sampled Consumer goods firms in Nigeria. The study also showed that both credit facilities and size have significant and positive effect on return on equity of the sampled Consumer goods firms in Nigeria. The study further revealed that credit facilities have significant and positive effect on return on equity of the sampled Consumer goods firms in Nigeria. Considering the strong positive and significant effect of credit facilities on the profit for the year, consumer goods firms should strategically leverage credit facilities to maximize their profits. This implies that management should explore opportunities to obtain and utilize credit facilities efficiently to enhance overall financial performance.

 

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