SOLVENCY RATIO AND FINANCIAL PERFORMANCE OF LISTED INDUSTRIAL GOODS FIRM IN NIGERIA EXCHANGE GROUP

The study examined solvency ratio and financial performance of industrial goods firms in Nigeria. Three specific objectives and hypotheses were formulated. The study adopted ex-post facto research design. Cross sectional panel data secondarily sourced from the annual financial reports and accounts of nine (9) listed industrial goods firms in Nigeria, from 2013 to 2023 were analyzed using descriptive statistics, normality graph, hausman specification test, and ordinary least square regression analyses with the aid of E-view 9 at 5% level of significance. The study proxy Solvency using Interest coverage ratio, debt to asset ratio and debt to equity ratio as explanatory variables while financial performance proxy using return on asset as response variable. The findings shown that the coefficient of interest coverage ratio is -0.012 and has a negative relationship with return on asset. The coefficient for Debt to asset ratio is -0.76 and has insignificant relationship with return on asset while the coefficient for debt-to-equity ratio is 0.05 with a positive relationship with return on asset of industrial goods firms in Nigeria. The study concludes that debt to asset ratio is the only significant variable on return on asset of listed industrial goods firms in Nigeria Exchange Group. Although interest coverage ratio and debt to equity ratio financial maintain negative and positive coefficients respectively with insignificant effect on the return on asset of listed industrial goods firms in Nigeria Exchange Group and recommends that managers of industrial goods firms in Nigeria should proficiently strategize the interest coverage ratio of the firms, in a manner that the Operational efficiency of the firm takes comparative advantage over the exposure of investment risk.