Citation:

Salihu Aliyu Modibbo, Mohammed Abubakar, Hauwa Modu, Kumshe. "Capital Structure and Financial Performance of Listed Consumer Goods Companies in Nigeria" International Research Journal of Economics and Management Studies, Vol. 3, No. 7, pp. 454-459, 2024.

Abstract:

This study examined the relationship between capital structure and financial performance of listed consumer goods companies in Nigeria for the period of (8) years 2015-2022. The study's population includes all twenty-one (21) listed consumer goods companies on the Nigerian Exchange Group (NGX) as of December 2022. The sample size for the study is ten (10) companies. The study used documented information acquired from the sampled businesses' financial statements and finances; the data was first evaluated using descriptive statistics to give summary statistics for each variable. Correlation analysis was then performed using the Pearson correlation approach to determine the relationship between both independent and dependent variables, followed by the OLS regression technique. The result revealed that capital structure proxy by total debt to total assets has a positive significant effect on financial performance (ROA) and (ROE), short-term debt to total assets has a negative insignificant effect on financial performance (ROA) and (ROE). In contrast, long-term debt to total assets has a positive insignificant effect on financial performance of listed consumer goods companies in Nigeria. Based on these results, this study proposes that policymakers and management of consumer goods businesses evaluate the appropriate capital structure while adhering to the business governance code.

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Keywords:

Capital Structure, Consumer Goods, Financial Performance, Nigeria.