European Journal of Accounting, Finance and Investment

Debt Maturity Structure And Profitability Transmission: Evidence From Short- And Long-Term Leverage In Listed Non-Financial Firms In Nigeria

Fasua, Kayode.O

ANAN University, Kwall, Plateau State

Sinebe, Michael Tonbraladoh

Department of Accounting, Delta State University, Abraka

Keywords: Debt Maturity Structure, Short-Term Debt, Long-Term Debt, Profitability, Leverage, Panel-Corrected Standard Errors (PCSE)

---

Abstract

This study investigated the effect of debt maturity structure on the profitability of listed non-financial firms in Nigeria, focusing on the transmission of profitability through short- and long-term leverage. Employing a quantitative research design, the study used secondary data from eighty purposively sampled non-financial firms listed on the Nigerian Exchange Group (NGX) over the period 2015–2024. Key independent variables include long-term debt ratio and short-term debt ratio, while profitability is proxied by Return on Capital Employed (ROCE), Return on Equity (ROE), and Debt/EBIT ratio. Operating cash flow is included as a control variable. Panel data analysis is conducted using the Panel-Corrected Standard Errors (PCSE) regression model to account for heteroscedasticity and cross-sectional dependence. The empirical results revealed that both long-term and short-term debt ratios exhibit largely insignificant effects on profitability, indicating that debt maturity choices are driven more by financing constraints than by performance optimization. In contrast, overall leverage intensity, measured by the debt-to-equity ratio, shows a stronger association with profitability variations and debt sustainability, highlighting that excessive leverage undermines firm performance through increased financial risk. Operating cash flow demonstrates limited direct influence on profitability. The findings suggest that in Nigerian non-financial firms, profitability transmission is less determined by the composition of debt maturity and more by capital structure discipline, earnings stability, and managerial efficiency. These insights emphasize the importance of prudent financial management and strategic leverage decisions in sustaining firm performance.

---

References

Abdulmumin, B. A., Afolabi, H. O., Oloyin-Abdulhakeem, B. O., Olofinlade, S. O., & Kolawole, K. D. (2025). Firms’ Characteristics and Debt Maturity Structure of Listed Oil and Gas Firms in Nigeria. Revista Científica Profundidad Construyendo Futuro, 23(23), 164-176.

Abideen, A. Z., Pyeman, J., Sundram, V. P. K., Tseng, M. L., & Sorooshian, S. (2021). Leveraging capabilities of technology into a circular supply chain to build circular business models: A state-of-the-art systematic review. Sustainability, 13(16), 8997.

Akan, D.C., Sinebe, M.T. & Bereprebofa, D. (2023). Capital Cost and Sustainability of Small and Medium-Scale Enterprises (SMEs) in Nigeria. GPH- International Journal of Science and Humanities research 6 (11), 13-24

Akpan, D. C. (2024). Cash flow Practices and Dividend Policy of Listed Health Care Firms in Nigeria. Direct Research Journal of Management and Strategic Studies, 5(3), 1-8.

Akhtar, A. (2025). The Nexus between Capital structure, Macroeconomic Factors, Firm-specific Factors & Financial performance: A Sectoral Analysis of Cement and Energy Industry in Pakistan. Forman Journal of Business and Innovation, 1(1).

Alhassan, I., & Islam, K. A. (2021). Liquidity management and financial performance of listed oil and gas companies in Nigeria. International Journal of Accounting and Finance Review, 8(1), 15–25.

Alzubi, K., & Bani-Hani, A. (2021). Determinants of debt-to-equity and its impact on the performance of industrial companies listed on Amman stock exchange. Journal of Governance and Regulation, 10(4), 353-364.

Azekkar, Y., Taghouti, Y., Abidar, B., Boustta, O., & El Ouafa, K. (2025). Financial and corporate governance determinants of dividend policy in family firms: A bibliometric analysis and future research agenda. Edelweiss Applied Science and Technology, 9(5), 896-914.

Babandi, I. G., & Barjoyal, B. B. (2021). Barriers to accessing finance institutional funding for Nigeria SMEs. International Journal of Business and Economic Research, 10(6), 219-226.

Bereprebofa, D., & Sinebe, M.T. (2022). Corporate performance effect on sustainability reporting of non-financial listed companies in Nigeria. West African Journal of Business and Management Sciences, 11(2), 157-167.

Bereprebofa, D., Sinebe, M.T., & Akpotu, J.E. (2023). Working Capital Management and Firms’ Financial Performance: Evidence from Listed Nigerian Firms. GPH-International Journal of Business Management, 6(11), 01-11.

Buhari, Y. A., & Aruwa, S. (2025). Moderating effect of agency cost on relationship between capital structure and value of listed firms in Nigeria. ANUK College of Private Sector Accounting Journal, 2(1), 35-45.

Chukwunwike, O. D., Ofoegbu, G. N., Okoroiwu, K. L., & Okafor, R. G. (2018). The potency of cash flow in predicting corporate performance. Account and Financial Management Journal, 3(6), 1591–1601.

Christopher, J. A. (2025). Effect of firm-specific characteristics on financial performance of listed agricultural firms in Nigeria. ANUK College of Private Sector Accounting Journal, 2(1), 118-126.

Daisy, C., & Julius, M. (2025). Cash flow management practices and financial performance of nonfinancial firms Listed in the Nairobi Securities Exchange. International Journal of Finance, 10(4). 1 – 22.

Elahi, M., Ahmad, H., Shamasul, H. M., & Saleem, A. (2021). The impact of operating cash flows on financial stability of commercial banks, evidence from Pakistan. The Journal of Asian Finance, Economics and Business, 8(11), 223–234.

Etim, E. O., Daferighe, E. E., Enang, E. R., & Nyong, M. B. (2022). Cash flow management and financial performance of selected listed companies in Nigeria. Indo-Asian Journal of Finance and Accounting, 3(1), 27–46.

Fasua, K. O., & Sinebe, M. T. (2024). Research and development expenditure as a determinant of long-term debt sustainability in Nigerian firms. Federal University Wukari Journal of Economics, Management & Social Science, 10(2), 237–263.

Forster, R., Lyons, A., Caldwell, N., Davies, J., & Sharifi, H. (2025). A lifecycle analysis of complex public procurement: an agency-institutional theory perspective. International Journal of Operations & Production Management, 45(1), 62–87.

Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm, managerial behavior, agency costs, and ownership structure. Journal of Financial Economics, 3(4), 305–360.

Jeroh, E. (2020). Corporate financial attributes and the value of listed financial service firms: The Nigerian evidence. Academy of Accounting and Financial Studies Journal, 24(2), 1–13.

Jeroh, E., Okolo, M.N., & Sinebe, M.T. (2022). Analysis of the Causal Relationship between Electronic Tax System, Tax Revenue and Economic Growth in Nigeria. Himalayan Journal of Economics and Business Management, Inlight Publisher, Kuwait. 3(2), 35-46.

Jihadi, M., Vilantika, E., Hashemi, S. M., Arifin, Z., Bachtiar, Y., & Sholichah, F. (2021). The effect of liquidity, leverage, and profitability on firm value: Empirical evidence from Indonesia. The Journal of Asian Finance, Economics and Business, 8(3), 423–431.

Lestari, E. (2023). Debt to equity ratio (DER) and firm size toward firm value: the mediating role of return on asset. Return: Study of Management, Economic and Business, 2(11), 1095–1109.

Mensah, L., Arhinful, R., & Owusu-Sarfo, J.S. (2025). Enhancing cash flow management in Ghanaian financial institutions through effective corporate governance practices. Corporate Governance, 25(4), 707–734.

Moridu, I., & Abidin, Z. (2023). Adapting Financial Management Strategies Amidst Economic Turmoil: A Case Study of Gama Corporate's Liquidity and Restructuring Initiative. The Eastasouth Management and Business, 2(01), 34-42.

Moro-Visconti, R. (2025). From business models to business planning. In Startup Valuation: From Strategic Business Planning to Digital Networking. Cham: Springer Nature Switzerland, 21–80.

Myers, S. C., & Majluf, N. S. (1984). Corporate financing and investment decisions when firms have information that investors do not have. Journal of financial economics, 13(2), 187-221.

Ndruru, F. (2025). The Role of Liquidity Management in Enhancing Corporate Financial Stability: a Systematic Literature Review on Cash Reserves and Marketable Securities Strategies. PRODUCTIVITY: Journal of Integrated Business, Management, and Accounting Research, 2(1), 09–17.

Nukala, V. B., & Prasada Rao, S. S. (2021). Role of debt-to-equity ratio in project investment valuation, assessing risk and return in capital markets. Future Business Journal, 7(1), 13.

Odhiambo, A., Koske, N., & Limo, P. (2022). Debt-Equity Ratio, CEO Power and Financial Performance of Listed Companies at the Nairobi Securities Exchange, Kenya. European Journal of Business and Management Research, 7(2), 330–338.

Onyemenam, C. M., Okwo, M. I., & Eze, C. U. (2023). Free cash flow activities and financial performance of listed pharmaceutical firms in Nigeria. International Journal of Research and Scientific Innovation, 10(9), 109–121.

Onyinye, N. P., & Ebiaghan, O. F. (2023). Off-Balance Sheet (Non-Financial) information disclosures and financial performance of quoted firms in the Nigerian industrial sector. Gulf Journal of Advance Business Research, 1(1), 73–81.

Rabberti, R., & Hariyanto, D. (2024). The Influence of Return on Asset, Debt to Total Asset Ratio, and Economic Value Added, on Company Value with Dividends as a Moderating Variable in Industrial Sector Companies. International Journal Papier Public Review, 5(4), 55–67.

Rosemary, I. H., Prince, A. I., Jack, A. E., Fausat, O. I., Enoch, E. N., & Samuel, U. E. (2021). Cash flow management and industrial firms’ performance in Nigeria. Universal Journal of Accounting and Finance, 9(4), 701–711.

Salsabila, W. G., Putri, A., & Mohammad, W. (2023). The Effect of Debt-to-Equity Ratio (DER) and Current Ratio (CR) on Return on Equity (ROE) in the Food and Beverage Companies. Himeka: Journal of Interdisciplinary Social Sciences, 1(1), 1–12.

Sinebe, M.T. (2020). Earnings management, IFRS adoption and corporate attributes: Evidence from Nigeria. AFAR Multidisciplinary Journal of management Sciences (MJMS) 2 (1) 209-222.

Sinebe, M.T. (2023). Corporate Characteristics Effect on Firm Growth: Evidence from Listed Non- Financial Firms in Nigeria. Middle European Scientific Bulletin, 34, 35-42.

Sinebe, M. T. & Henry, P. O. (2023). Evaluating Return on Investment as A Tool for Investment Decisions Making and Firm’s Performance. University Of Port Harcourt Business School, African Journal of Accounting, Finance and Marketing 7 (1) 96-106.

Stephen, E., Sinebe, M. T., Mokobia, N. A., Agbogun, O. E., & Ighoroje, J. (2024). Pre and Post Treasury Single Account (TSA) Implementation and the Nigeria’s Macroeconomic Performance. Journal of Ecohumanism, 3(6), 1019–1033.

Sinebe, M. T., Jeroh, E., & Ebiaghan, F. O. (2025a). Liquidity metrics as predictors of share price movements in Nigeria. RIK International Journal of Business and Management (RIK-IJBM) 9 (1), 104-114.

Sinebe, M. T., Jeroh, E., & Ebiaghan, F. O. (2025b). Moderating Role of Leverage on the Relationship Between Business Models and Value Relevance of Accounting Information. GPH-International Journal of Business Management, 8(03), 17-31.

Sinebe, M. T. (2025a). The influence of financial leverage and market capitalization on firms’ profitability. (IMSU) International journal of Accountancy, Finance and Taxation. 2 (1), 17- 30.

Sinebe, M.T. (2025b). Determinants of earnings management practices and financial transparency in Nigeria - A panel data analysis. ESUT Journal of Social Sciences & Humanities, 10 (1), 127-139.

Sinebe, M.T. (2025c). Examining the moderating effect of market capitalization on the leverage-share price relationship. Imo State University /Business & Finance Journal 16 (1) 160-175.

Sinebe, M. T. (2025d). Capital structure, market capitalization, and share price: A fixed effects analysis on industrial goods firms in Nigeria. International Journal of Intellectual Discourse, 8(1), 251-262.

Uchegbu, C. U., Egbunike, P. A., & John-Akamelu, C. R. (2023). Effect of cash flows management on financial performance of listed manufacturing companies in Nigeria. Journal of Global Accounting, 9(4), 314–327.

Ugo, C. C., & Egbuhuzor, C. A. (2022). Effect of cash flow management on financial performance, evidence from the pharmaceutical industry in Nigeria. African Journal of Accounting and Financial Research, 5(1), 1–13.

Utama, S., Purmono, B. B., Malini, H., Mustarudin, M., & Wendy, W. (2023). The influence of debt equity ratio and times interest earned ratio through return on assets on banking companies’ share price. International Journal of Applied Finance and Business Studies, 11(3), 418–429.

Yahaya, O. A. (2026). Capital Structure, Inflation Rate, and Firm Value in Nigeria. Journal of Economics and Business, 18(1), 697-742.

Yeboah, M., Yeboah, B., Atuahene, S. O. O., & Darko, E. A. (2024). Macroeconomic and firm-specific determinants of capital structure of listed firms in emerging markets. Risk Governance & Control: Financial Markets & Institutions, 14(4).

Yusuf, K. U., & Musa, A. B. (2025). Impact of Country Macro Factors and Firm Specific Factors on Debt Capital Structure: Evidence from Non-Financial Firms in Nigeria. FUDMA Journal of Accounting and Finance Research [FUJAFR], 3(3), 21-32.