IMPACT OF CAPITAL STRUCTURE ON FINANCIAL PERFORMANCE OF LISTED AGRICULTURAL COMPANIES IN NIGERIA

Authors

  • Ahmad Muhammad Ahmad Nigerian Army University Biu
  • Shehu Usman Hassan Ph.D Federal University of Kashere, Gombe State
  • Abubakar Abubakar

DOI:

https://doi.org/10.57233/gujaf.v3i3.189

Keywords:

long-term debt, short term debt, total debt ratio, total equity ratio, return on asset

Abstract

A company is usually faced with the challenge of financing investments; the management is to decide on the optimal mix of capital structure decision. This study sets to investigate the influence that capital structure of a firm has on financial performance of listed manufacturing firms in Nigeria for period spanning from 2017-2021. The dependent variable of the study is financial performance proxy by return on asset (ROA) while the independent variable of the study is capital structure proxy by long-term debt, short term debt, total debt ratio and total equity ratio. The population of the study consist of all the 5 listed manufacturing firms in Nigeria and the sampling technique was the census arriving at a 25 firm year observations. The multiple regressions was employed for the data analysis and the study revealed that long-term debt ratio has a negative insignificant relationship with return on asset while short-term debt, total debt ratio and total equity ratio have positive significant influence on return on asset. The study recommends that the management of listed manufacturing firms in Nigeria should pay attention in curtailing long-term debt and improving on short term debts in order to improve financial performance.

Author Biographies

Ahmad Muhammad Ahmad , Nigerian Army University Biu

Department of Accounting,
Nigerian Army University Biu

Shehu Usman Hassan Ph.D, Federal University of Kashere, Gombe State

Professor of Accounting and Finance,
Department of Accounting,
Federal University of Kashere, Gombe State

Abubakar Abubakar

Department of Accounting,
Federal University of Kashere, Gombe State

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Published

2022-10-30

How to Cite

Ahmad , A. M., Hassan, S. U., & Abubakar, A. (2022). IMPACT OF CAPITAL STRUCTURE ON FINANCIAL PERFORMANCE OF LISTED AGRICULTURAL COMPANIES IN NIGERIA. Gusau Journal of Accounting and Finance, 3(3), 23. https://doi.org/10.57233/gujaf.v3i3.189

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