Research Objectives: The study examined the effect of corporate financial policy on profitability of industrial goods firms in Nigeria. The specific objectives of the study were to determine the effect of share Capital, Long term Debts, Debt Equity Ratio, Debts Asset Ratio and Interest Coverage Ratio on Return on Asset of Industrial goods firms in Nigeria.
Methodology: The study was based on 100 panel data observations from the annual financial statement of sampled Ten (10) industrial goods firms quoted on the Nigeria exchange Group as at 2013-2022. Descriptive Statistics, Unit Root test and Panel Least Square Regression Analysis were used to analyze the data.
Findings: Research results suggest that the effect of Share Capital on Return on Assets of industrial goods firms in Nigeria is positive and also statistically significant. {SHC Coefficient is 0.027780, while the P-value is 0.0062 (0.0062<0.05)}. The effect of Long Term Debt on Return on Assets of the firms is positive, but statistically non-significant. {LTD Coefficient is 0.001630, while the P-value is 0.7198 (0.7198>0.05)}. Debt Equity Ratio (DER)on Return on Assets (ROA) of the firms is positive, but statistically non-significant. DER Coefficient is 0.000481, while the P-value is 0.6110 (0.6110>0.05)}. The effect of Debt Assets Ratio (DAR) on Return on Assets (ROA) of the firms is positive, but statistically non-significant during the period.{DAR Coefficient is 0.097675, while the P-value is 0.0651 (0.0651>0.05)}. The effect of Interest Coverage Ratio (ICR) on Return on Assets (ROA) of the firms is positive and also statistically significant. {ICR Coefficient is 0.001232, while the P-value is 0.0000 (0.0000<0.05)}.
Conclusion: The implication of these findings is that return on assets will improve as any of the explanatory variables is increased.
Recommendation: The study recommends that the firms should use public offering, bonus or right issue to increase the proportion of share capital, use long term debt and a mixture of debt and equity to fund their long term assets and should continue to mix various forms of debts in their capital structure while being guided.
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