Capital Structure And Financial Performance Of Selected Consumer Good Firms In Nigeria
Abstract
Abstract
Decision on gearing is a very important aspect of Corporate Financing process which cannot be overemphasized by any organisation because of its implications on the performance and long run organisational survival. This study analysed the connection between Nigerian manufacturing companies' financial structure and performance using design of ex post facto research. Secondary sources of data for Eight (8) Nigerian manufacturing companies that are listed and have been operating for at least 8 years considering their performances as reflected in their shares for ten years (2015 to 2024) sourced from their published financial statements. Response variable was ROA, a proxy for financial performance calculated as Profit/Total Assets, while independent variable was Capital structure proxy Equity Ratio and Debt Ratio. Analysis including descriptive statistics and correlation matrix were carried out. The outcome of the analysis using Pooled Ordinary Least Square showed that both equity ratio and debt ration positively and significantly impacted return on assets of the selected manufacturing companies under review, the study recommended that Firms should seek professional advice from time to time to fix capital structure that will always maximise shareholders wealth, minimise cost of capital and increase firm’s value.
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