For correspondence:-
Received: 1 March 2018 Accepted: 29 March 2018 Published: 31 March 2018
Citation: Capital Structure and Firm Financial Performance. Account Tax Rev 2003; 2(1):56-71 doi:
© 2003 The authors.
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Abstract
Capital structure is important in the business affairs of any going concern entity as is it the overall source of finance used by a company in financing its operations and has been considered as one of the most important factors in firm financing policy due to its crucial role in corporate performance. The study sought to examine the effect of capital structure on the financial performance of firms in Nigerian manufacturing sector. The population of the study was all the listed manufacturing companies listed on the Nigerian Stock Exchange, a sample of 10 listed companies was selected. The research design adopted was ex-post facto using four models to analyse the impact of capital structure on firms’ performance. The study used balanced panel data of 100 observations from the 10 listed companies for the periods ranging from 2007 - 2016. Descriptive statistics and regression were used as tools of analysis. The study reveals that there are statistically significant and non- significant effects of capital structure on performance variables. Finally, the study recommends that manufacturing companies should adopt balanced capital structure strategy that will optimise company’s performance and corporate value.
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