EFFECT OF CAPITAL STRUCTURE ON THE PERFORMANCE OF QUOTED COMPANIES IN NIGERIAN EXCHANGE GROUP

Festus Ubogu, PhD, Venitus Chinyereugo Ogueze

Abstract


This research examines the effect of capital structure on firms' performance with a study of quoted companies in Nigeria from 2020 to 2024 with the purpose of providing a critical appraisal of the need and importance of capital structure. Descriptive and regression research technique was employed to consider the impact of some key variables such as Returns on asset (ROA), Returns on equity (ROE), Total debt ratio (DR), equity ratio (DER) and Liquidity current ratio (LCR) on firms performance. Secondary data was employed using data derived from published financial reports for the period 2020- 2024 from a sample of five quoted companies. From our findings, we observe that capital structure measures (Total debt, Debt to equity ratio and Liquidity current ratio)) are negatively related to firm performance (measured by ROA and ROE). It is hereby recommended that firms should use more of equity than debt capital in financing their business activities.


Keywords


Effect, Capital structure, Performance, Quoted Companies, Nigerian Exchange group.

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References


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