THE IMPACT OF LEVERAGE ON FINANCIAL PERFORMANCE OF LISTED NONFINANCIAL FIRM IN KENYA

Abstract

Literature available shows that financial performance is known variable on Listed Non financial firms in developed economies. This study sought to establish the effects of Leverage on financial performance of listed non-financial firms in Kenya. The objective of the study was to access the impact of leverage on financial performance of listed non-financial firms in Kenya. The study also adopted supporting Static trade-off theory for the study objective. The study used causal research design and the target population constituted 42 listed non - financial firms at the NSE under different categories. The study used secondary panel data contained in the annual reports and financial statements of listed non-financial companies from the NSE Hand Book 2009-2013. A regression model was used to analyze the objective and the results were presented using descriptive statistics and inferential analysis such as Student t test. The results of statistical tests show that financial leverage has a negative and significant effect on effect corporate financial performance (ROA).