EFFECT OF FINANCIAL LEVERAGE ON THE EARNING PER SHARE OF LISTED MANUFACTURING FIRMS IN NIGERIA

ABSTRACT This study concentrated on effect of financial leverage on earnings earnings per share of quoted manufacturing firms in Nigeria. The specific objectives of the study were to examine the effect of long-term debt to equity, short-term debt to equity and interest cover on earnings per share of listed manufacturing firms in Nigeria. This study was limited to consumer goods firms and period of 2014 – 2023. Ex-post facto research design and ten (10) manufacturing firms were selected for sample size. The data were obtained from annual report and financial statement of the selected firms. E-view was used as statistical tool and descriptive statistic which included mean, median, standard deviation and etc were used to analyse each variables. Panel least square was used to test hypotheses at 5% level of significance. The study found that long-term debt to equity has significant and positive effect on earnings per share of listed manufacturing firms in Nigeria. Furthermore, it was revealed that short-term debt to equity has significant and positive influence on earnings per share of listed manufacturing firms in Nigeria. Finally, the study discovered that interest cover has insignificant and positive effect on earnings per share of listed manufacturing firms in Nigeria. Therefore, the study concluded that financial leverage has significant effect on earnings per share of listed manufacturing firms in Nigeria. Hence, it was recommended that Borrowed funds should be channeled to areas that will boost profits in order to enhance EPS which is a key performance indicator.