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Lease Financing and Profitability: Evidence from Nigerian Quoted Conglomerates

Author

Listed:
  • Fidelis Anake Atseye

    (Department of Banking and Finance, Faculty of Management Sciences, University of Calabar, Calabar, Nigeria.)

  • Helen Walter Mboto

    (Department of Banking and Finance, Faculty of Management Sciences, University of Calabar, Calabar, Nigeria.)

  • Suleiman Gbenga Lawal

    (Department of Banking and Finance, Faculty of Management Sciences, University of Calabar, Calabar, Nigeria.)

Abstract

The paper examined the causal relationship between lease financing and profitability of Nigerian quoted conglomerates for the period spanning 2012 2017. The study focused on 6 conglomerates that are quoted on the Nigerian Stock Exchange as at 2017. Data were collated from published accounts of the affected companies. Data were analysed using descriptive and pooled OLS multiple regression statistics. Unit Root Test was conducted using Augmented Dickey Fuller.. Estimated panel results indicated a negative and insignificant impact of Fixed Assets Turnover (FAT) on Return on Assets (ROA), Lease Financing (LFN) had a positive and insignificant impact on ROA, and Debt Ratio (LTDR) had a negative and insignificant impact on ROA. Firm size was used to control possible problem of non-linearity and heteroscedasticity. Based on these findings, leasing option was recommended as one of the sources of debt financing to boost the capital of Nigerian conglomerates to enable them to absorb losses, multiply fixed assets and grow continuously, thus providing employment and income in terms of tax revenue, profits, dividends, and wages and salaries to households for national growth and development.

Suggested Citation

  • Fidelis Anake Atseye & Helen Walter Mboto & Suleiman Gbenga Lawal, 2020. "Lease Financing and Profitability: Evidence from Nigerian Quoted Conglomerates," International Journal of Economics and Financial Issues, Econjournals, vol. 10(1), pages 132-137.
    • Handle: RePEc:eco:journ1:2020-01-17
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    More about this item

    Keywords

    Lease Financing; Profitability; Quoted Conglomerates;
    All these keywords.

    JEL classification:

    • G3 - Financial Economics - - Corporate Finance and Governance
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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