Capital Structure and Financial Performance of Listed Manufacturing Companies in Nigeria
Year: 2024
Type: article
Abstract: The study focused on the impact of capital structure on the financial performance of manufacturing companies in Nigeria. The study specifically aim to determine the relationship between equity capital, debt capital and return on asset as a proxy of financial performance. The study adopts an ex-post facto research design. Data for the study was obtained from audited annual reports and accounts of the 10 sampled manufacturing firms listed in the Nigerian Exchange Group for a period of 10 years covering 2013 to 2023. Both descriptive and inferential statistics was employed to analyze the data while regression analysis was used to test the hypotheses. The result reveals that equity capital has a positive and significant impact on return on asset. Debt has a negative and significant impact on return on asset. The study recommends among others that manufacturing companies should strive for a balanced capital structure that maximizes the benefits of equity while minimizing effects of excessive debt. Manufacturing companies should regularly monitor their debt levels not to exceed manageable thresholds
Authors: Ekhalume Henry, Omokhafe, Prof Enyinna, Okpara, Eke Robert, Ike Ph.D.
Institution: Wellspring University
Language: English
Subfield: Accounting
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W6930659585
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