DEVELOPING EXPERIENTIAL ENTREPRENEURIAL LEARNING AND ENTREPRENEURIAL READINESS AMONG BUSINESS STUDENT IMPLEMENTERS IN A BUSINESS SCHOOL-BASED ENTREPRENEURSHIP HUB
Keywords:
Debt Equity mix, Performance, Quoted Indigenous Oil and Gas Companies, NigeriaAbstract
This study examined the effect of debt-equity mix on the performance of quoted indigenous oil and gas companies in Nigeria, using panel data analysis over the period 2015–2024. The performance indicators employed were return on assets (ROA), return on equity (ROE), and Tobin’s Q, while the explanatory variables comprised short-term debt ratio (STD), long-term debt ratio (LTD), equity-debt ratio (EDR), total debt ratio (TDR), and firm size (FSIZE). The empirical results revealed mixed outcomes across the performance measures. Specifically, short-term debt ratio exhibited a negative and significant effect on ROE and Tobin’s Q but remained insignificant on ROA, suggesting that short-term financing undermines profitability and market value but exerts minimal influence on asset utilization. Long-term debt ratio showed a negative relationship with both ROA and ROE, but a positive and significant effect on Tobin’s Q, implying that while long-term leverage erodes accounting-based profitability, it enhances firm valuation by investors. Similarly, total debt ratio negatively and significantly influenced ROA and ROE but had no significant effect on Tobin’s Q, reflecting the risk associated with excessive leverage. Equity ratio displayed a negative and significant effect on ROA and ROE but a positive and significant influence on Tobin’s Q, indicating that equity financing may dilute returns yet signal resilience and growth prospects to the market. Firm size had a positive but insignificant effect on ROA and ROE, while exerting a positive and significant impact on Tobin’s Q, underscoring the market’s preference for larger firms in the sector. Overall, the findings underscore the importance of adopting an optimal capital structure in the oil and gas industry to balance profitability, risk, and market value. The study recommends that managers minimize reliance on short-term financing, cautiously utilize long-term debt to align with value-creating projects, and strategically strengthen equity structures to attract investor confidence. Policy makers, regulators and financial managers should also design frameworks that promote sustainable financing while mitigating the risks of excessive leverage in Nigeria’s quoted indigenous oil and gas sector.
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