The Effect of Capital Structure on Financial Performance of Listed Industrial Goods Firms in Nigeria

Abstract

The broad objective of this study is to investigate the effect of capital structure on financial performance of listed industrial goods firms in Nigeria. Correlational research design was adopted for the study, The data was sourced from audited annual reports and account of the 9 sampled firms from 2015-2024 out of the population of 13 listed industrial goods firms in Nigeria .The analysis of the data showed that Debt-equity ratio has no significant effect on return on assets of listed industrial goods firms in Nigeria, also Total-debt ratio has no significant effect on return on assets of listed industrial goods firms in Nigeria. The findings also reveal that Long-term debt ratio has no significant effect on return on assets of listed industrial goods firms in Nigeria lastly findings of the study shows that Short-term debt ratio has no significant effect on return on assets of listed industrial goods firms in Nigeria. The study recommends that; Industrial goods firms in Nigeria should focus on improving their relatively low financial performance based on long-term borrowing and to look for other determinants that would improve their financial performance. Industrial goods firms should rely less on short-term debt, which forms the major part of their leverage, and focus more on developing internal strategies that can help improve their accounting performance as their performance for the period studied was very low and insignificant.