Capital structure and performance of quoted conglomerates firms in Nigeria
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Date
2013-05-28
Journal Title
Journal ISSN
Volume Title
Publisher
Department of Accounting, Faculty of Administration, Nasarawa State University, Keffi.
Abstract
This study investigates the impact of capital structure on firm performance by analysing the relationship between financial performance of Nigerian firms, measure by return on asset and earnings per share with short term and long term debt. Two variables identified in literature to have influence on firm performance, namely size and efficiency are used as control variables. The study covers seven conglomerates firms in Nigeria for the year 2002 through to 2011. Panel data for the selected firms were generated and analysed using ordinary least square with the application of random effect regression as a method of estimation, in which a series of regression analyses were executed for each model. The study finds that short term debt has significant negative impact on the two accounting measure of performance studied. The results also showed that long term has significant positive impact on ROA but not with earnings per share.net margin of the firms. The study recommends that quoted conglomerates firms in Nigeria should reduce debt levels in their capital structure so as to enhance positive performance to the interest of the stakeholders.
Description
It describes how capital structure influence performance using ROA and ROE
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Citation
Lawal, T. Bayero, A.S.M. and Lawal L.O. (2013): Capital structure and performance of Quoted conglomerates firms in Nigeria. Journal of Finance and Accounting Research, 5 (1): 11-26.