Enhancing the Performance of Food and Beverage Manufacturing Companies through Debt Capital in Nigeria (2012-2021)

Abstract

This study examined how to enhance the performance of food and beverage companies through the debt capital in Nigeria. The study used secondary data sourced from the financial statements of the selected foods and beverages companies between 2012 and 2021. A sample of four (4) listed firms was purposively selected from the study population of eight (8) listed foods and beverage listed manufacturing companies on the Nigerian Exchange Group Plc as of 31st December 2021 based on the availability of data. The study employed panel models of the fixed effect and random effect for data analysis. Findings from the study revealed that the coefficient of −0.008 with a P-value of 0.94 > 0.05 showed a negative and insignificant impact of short-term debts on the performance of the firms, while the coefficient of 0.032 with a P-value of 0.76 > 0.05 found a positive and insignificant impact of long- term debt on the performance of the companies. The study also found that the firms’ total assets were financed by 40 % of short-term debt and 16% of long-term debt. The study concluded that the results were mixed as the application of short-term debt negatively enhanced the performance of the foods and beverage manufacturing companies in Nigeria, while the usage of long-term debt positively enhanced the performance of similar firms. The study, therefore, recommended long-term debt usage for food and beverage manufacturing companies in Nigeria to finance their activities.