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Capital Structure and Financial Performance of Listed Consumer Goods Firms in Nigeria

Author

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  • Okezie, Stella Ogechukwu

    (Department of Accounting, Michael Okpara University of Agriculture Umudike)

  • Eke, Ngozi Ogbonnaya-Ugwo

    (Department of Accounting, Michael Okpara University of Agriculture Umudike)

  • Ujah, Iheanyinchukwu Promise

    (Department of Accounting, Michael Okpara University of Agriculture Umudike)

Abstract

This study examined the impact of capital structure on financial performance of listed firms in Nigerian stock exchange. Specifically, the study looked at the effect of long-term debt to total investment on return on investments; the effect of short-term debt to total investment on return on investments; and the effect of total debt to total investment on return on investments. Data were described using descriptive statistics, Pearson correlation coefficient while multiple regression analytical technique with the aid of econometrical tool Eviews 9 was used in analyzing the data. . The result of analysis indicates that long term debt to total investments, short term debt to total investments, and total debt to total investments have significant positive impact on return on investments at 5% level of significance. Based on the findings, the study concluded that, the impact of capital structure on financial performance is positive and that capital structure explains a larger change in return on investments. Therefore, the study recommends, that consumer goods companies should strategically leverage debt to finance profitable investments by revisiting their capital structure policy to allow for more optimal levels of debt.

Suggested Citation

  • Okezie, Stella Ogechukwu & Eke, Ngozi Ogbonnaya-Ugwo & Ujah, Iheanyinchukwu Promise, 2025. "Capital Structure and Financial Performance of Listed Consumer Goods Firms in Nigeria," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 9(4), pages 4894-4905, April.
    • Handle: RePEc:bcp:journl:v:9:y:2025:issue-4:4894-4905
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    References listed on IDEAS

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