Equity and Debt Financing on the Profitability of Cement Industry in Nigeria

Abstract

This study examined equity and debt financing on the profitability of the cement industry in Nigeria. Data were collected 2010 to 2020 for 3 cement firms. The results revealed that total debt (TDTA) has a positive effect on return on assets (ROA), equity (DER) has a negative effect on return on Asset (ROA) and the control variables; sales growth (SG) has a negative effect, while firm size (FMSZ) is positive. This study, therefore recommends that cement industry owners should diversify their sources of financing their businesses by focusing more on debts so as to save their costs and reduce their risk in the investment. Industry owners should look outside the box by employing other sources of financing their businesses like debentures, bonds and so on, other than absolute dependence on equity.