Effects Of Financial Leverage On Company Performance

level of dept financing employed does not effect the performance of the firms under study.
HI: The level of dept financing employed effects the performance of the firms under study.
HYPOTHESIS 3
HO: The state of economy measured by the grass domestic project does not affect the performance of Nigeria Bottling Company PLC.
HI: The state of the economy measured by the grass domestic products the performances of the firm under study.
NOTE:
HO: Implies Null Hypothesis
HI: Implies Alternative Hypothesis.

1.4 SIGNIFICANCE OF THE STUDY
The significant of the study is to enable us to evaluate how the economy effect the performance of the Nigeria Bottling Company PLC.
This study will therefore enhance an understanding on how financial leverage can be said to thrive well in an economy that is forming in that as dept employed more founds to increase, for investment and as such profit fends to increase.
The study will be of almost importance to the school library, students in management and for future project writers and research who will wish to use it as reference to their own study.

1.5 SCOPE AND LIMOTATION OF THE STUDY
The scope of this study centers around the company within the manufacturing sector of the Nigerian economy. “NIGERIA BOTTLING COMPANY PLC”. Analysis on the company. I.e. historically. Operationally and structurally. Ration analysis would also be carried out in order to reach a final objective conclusion
The limitation of the study includes data, since data used are only data in published reports for financial analysis. The confidentially of such data the firm reserved to themselves. Given the economic trend i.e. inflationary effects which affects the level of activity of the firm, which includes firm with dept financing also.

1.6 DEFINITION OF TERMS
1. FINANCE
This is the system by which the income of a company is raised and administered. It deals with methods for supplying capital needed to acquire, development and operate real property
2. FINANCING INVESTMENT
This id the purchase of sound stock or bound compared to real investment in a capital asset such as real estate or plant and machinery.
3. FINANCIAL LEVERAGE
This is the use of external financing in order to raise the profit of the company that employs it. It has effect on the per share earnings of the common stock of a company when large sums must be paid for bound interest or preferred stock dividend on both, before the common stock is established to share in earning
Financial leverage may be advantageous for the common stock when earning are good enough but may work against the common stock when earning decline.
4. DEPT FINANCING
This is the long term borrowing of money for business, usually in exchange for dept securities, for the purpose of obtaining working capital or other founds necessary to operational needs
5. EQUITY FINANCING
This is the acquisition of money for capital or operating purposes in exchange for a share or shares in the business being financed.