Academy of Accounting and Financial Studies Journal (Print ISSN: 1096-3685; Online ISSN: 1528-2635)


Capital Structure and Firm Performance: Evidence from Nigerian Consumer Goods Manufacturing Firms

Author(s): Michael Ojo Oke, Babajide Francis Fadaka

The paper examines the capital structure and firm performance of Nigerian consumer goods manufacturing firms listed on the Nigerian stock exchange. Inconsistencies in the results on the relationship between capital structure and firm performance necessitated this study. Secondary data was collected from consumer goods manufacturing companies listed on the Nigerian stock exchange. Eighteen companies were used in this study, and panel data method was used in sampling the 18 listed manufacturing firms from 2008-2018. The study adopted the popular accounting and financial measures used in the vast literature on the subject matter namely, return on equity, return on asset, Tobin’s Q and earning per share) as the dependent variable. In measuring the independent variable of the study, which is capital structure, long term debt, short term debt, total debt ratios, and growth was adopted. The study also included size as a control variable. The results from the regression analysis carried out in this study show that firm performance has a negative relationship with the capital structure in listed Nigerian manufacturing firms. Additionally, growth and performance had a positive correlation for the 18 consumer goods manufacturing companies.

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