Effects of Debt Financing on the Financial Performance of Investment Firms Listed in Nairobi Securities Exchange – Kenya
| dc.contributor.author | Gathogo, Stephen Mwai | |
| dc.contributor.author | Irungu, Anthony Mugetha | |
| dc.date.accessioned | 2025-11-04T08:24:11Z | |
| dc.date.available | 2025-11-04T08:24:11Z | |
| dc.date.issued | 2024-06 | |
| dc.description.abstract | Achieving optimal financial performance is imperative for businesses, especially in the competitive landscape of global markets marked by intense rivalry and an oligopolistic structure. Many companies listed on the Nairobi Securities Exchange (NSE) have adopted a strategy of leveraging debt to bolster their asset base and enhance profitability. Despite the anticipated benefits for operational support, historical trends underscore a concerning pattern. Companies heavily reliant on loans within their shareholders' wealth have consistently incurred substantial losses, leading to severe credit crises where their debts surpass their total wealth. This study, employing a descriptive survey design focusing on five NSE-listed investment firms, investigates the repercussions of debt financing on financial performance. Drawing on data from diverse sources, including CMA reports and online resources, the quantitative analysis reveals a clear correlation: debt financing corresponds to a decline in the financial success of investment firms. With a mean debt-to-equity ratio (D/E) of 1.247, suggesting adequacy for shortterm obligations, it aligns with the consensus that D/E should not exceed 2.0. The study underscores the need for policymakers and regulatory bodies, particularly the CMA, to formulate effective guidelines and policies for prudent debt management among listed investment firms. | |
| dc.identifier.citation | Gathogo, S. M., & Irungu, A. M. (2024). *Effects of debt financing on the financial performance of investment firms listed in Nairobi Securities Exchange – Kenya.* *International Journals of Academics & Research (IJARKE) Business & Management Journal, 6(4), Article 04. [https://doi.org/10.32898/ibmj.01/6.4article04](https://doi.org/10.32898/ibmj.01/6.4article04) | |
| dc.identifier.issn | 2617-4138 | |
| dc.identifier.other | 10.32898/ibmj.01/6.4article04 | |
| dc.identifier.uri | https://ir-library.ku.ac.ke/handle/123456789/31913 | |
| dc.language.iso | en | |
| dc.publisher | IJARKE Journals | |
| dc.title | Effects of Debt Financing on the Financial Performance of Investment Firms Listed in Nairobi Securities Exchange – Kenya | |
| dc.type | Article |