ABSTRACT
This study sought to establish the effect of debt financing on financial performance of manufacturing firms listed at the Nairobi Securities Exchange. The study used descriptive design. Ten listed manufacturing firms formed the population of the study and secondary data was collected for a period of five years (2017- 2021). Data was analysed using regression and correlation analysis. The study established that there is a weak negative and insignificant relationship between debt financing and financial performance as per the correlation analysis. The study also concluded that an increase in debt financing would contribute to a decrease in financial performance of the listed manufacturing firms in Kenya. This contradicts tradeoff theory which supported the use of debt financing to improve financial performance.