ANALYZING THE INFLUENCE OF LEASE FINANCING ON CORPORATE FINANCIAL OUTCOMES OF NIGERIAN NON-FINANCIAL COMPANIES

Abstract

The study determined the effect of lease financing on the corporate financial performance of quoted non-financial companies in Nigeria. The specific objective was to examine the effect of operating leases and capital leases on the return on assets of quoted non-financial companies in Nigeria. Ex-post facto research design was used in the study. The population of the study comprised 63 listed non-financial firms in Nigeria. Data were collected from thirty (30) quoted companies between 2011-2020. The Panel Regression results estimated using Panel Corrected Standard Error (PCSE) revealed the following: Operating leases has significant effect on the Returns on assets (ROA) of quoted non-financial companies in Nigeria at the 0.05 significance levels; capital leases have significant effect on the Returns on assets (ROA) of quoted nonfinancial companies in Nigeria at the 0.05 significance levels. In conclusion, the positive effect of finance leases on ROA of Nigerian non-financial quoted companies is a result of higher contribution of leases to profits, than to assets components. The study recommends that firms should embrace operating leases financing as a method of financing their operations in order to improve operating profits, as such leases do not utilize or deplete existing working capital of firms.