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Effect of Capital Structure on Corporate Profit. Evidence from Cement Manufacturing Firms in Nigeria

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  • Paul Aondona Angahar
  • John Inyongun Ivarave

Abstract

The study empirically investigated the effect of capital structure on corporate profit; evidence from cement manufacturing firms in Nigeria. It focused on quoted cement manufacturing firms in Nigeria from 2004- 2013 using ex-post facto research design. Multi regression analysis was used to test the hypotheses. The findings were that, there exists a positive and significant effect of short term debt, long term debt and shareholder’s fund on the profit of cement manufacturing firms in Nigeria. The study recommends among others that, management should adopt a sound financing mix which will be beneficial to firms in the long run also; policies by Government should create a favourable macro-economic environment for cement companies to operate profitably.

Suggested Citation

  • Paul Aondona Angahar & John Inyongun Ivarave, 2016. "Effect of Capital Structure on Corporate Profit. Evidence from Cement Manufacturing Firms in Nigeria," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 6(2), pages 159-168, April.
    • Handle: RePEc:hur:ijaraf:v:6:y:2016:i:2:p:159-168
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    References listed on IDEAS

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    1. Joshua Abor, 2005. "The effect of capital structure on profitability: an empirical analysis of listed firms in Ghana," Journal of Risk Finance, Emerald Group Publishing, vol. 6(5), pages 438-445, November.
    2. Gavin Cassar & Scott Holmes, 2003. "Capital structure and financing of SMEs: Australian evidence," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 43(2), pages 123-147, July.
    3. Titman, Sheridan & Wessels, Roberto, 1988. " The Determinants of Capital Structure Choice," Journal of Finance, American Finance Association, vol. 43(1), pages 1-19, March.
    4. Gavin Cassar & Scott Holmes, 2003. "Capital structure and financing of SMEs: Australian evidence," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 43(2), pages 123-147.
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    Cited by:

    1. Ibrahim Abidemi Odusanya & Olumuyiwa Ganiyu Yinusa & Bamidele M. Ilo, 2018. "Determinants of Firm Profitability in Nigeria: Evidence from Dynamic Panel Models," SPOUDAI Journal of Economics and Business, SPOUDAI Journal of Economics and Business, University of Piraeus, vol. 68(1), pages 43-58, January-M.
    2. Abbas Rezazadeh Karsalari & Mohammad Tavoosi Asl & Sadegh Ahmadipour, 2017. "Investigating the Relationship between Capital Structure and Cash Resources Returns in the accepted Companies in the Securities Market," International Journal of Academic Research in Business and Social Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences, vol. 7(9), pages 223-231, September.
    3. Norbert Ouma Ondenge & Peterson Obara Magutu & Richard Nyaanga Ongeri, 2020. "Operations Modernization Strategies And Service Delivery Among Non-Commercial State Owned Ent Ities In Kenya," Noble International Journal of Social Sciences Research, Noble Academic Publsiher, vol. 5(5), pages 75-86, May.

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