Capital Structure and Performance of Selected Industrial Goods Firms on the Nigerian Stock Market PDF Download
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Author: Promise Nkak
Publisher:
ISBN:
Category :
Languages : en
Pages : 7
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Book Description
How really is performance influenced by capital structure? There have being different views by different scholars on this topic. Therefore this study examined the relationship between capital structure and firm's performance of quoted industrial goods on Nigeria Stock Exchange (NSE). Five firms were selected for the study with secondary data covering for six years (2014-2019). We employed the multiple regression model in testing our hypotheses, return on equity (ROE) serve as the dependent variable for measuring performance while the independent variables are measured by three variables which Non-current debt to total assets (NCD), current debts to total assets (CD) and total debts to equity (TDE). Our findings revealed that two of our independent variables (NCD and TDE) have a statistical significant relationship with ROE however TDE have a negative relationship with ROE, while the other independent variable CD has no statistical significant on performance. We therefore recommend that in considering the capital mix/structure of the firms long term financing should be consider first, while CD should be consider last and also proper matching should be carried out between equity and debt.
Author: Promise Nkak
Publisher:
ISBN:
Category :
Languages : en
Pages : 7
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Book Description
How really is performance influenced by capital structure? There have being different views by different scholars on this topic. Therefore this study examined the relationship between capital structure and firm's performance of quoted industrial goods on Nigeria Stock Exchange (NSE). Five firms were selected for the study with secondary data covering for six years (2014-2019). We employed the multiple regression model in testing our hypotheses, return on equity (ROE) serve as the dependent variable for measuring performance while the independent variables are measured by three variables which Non-current debt to total assets (NCD), current debts to total assets (CD) and total debts to equity (TDE). Our findings revealed that two of our independent variables (NCD and TDE) have a statistical significant relationship with ROE however TDE have a negative relationship with ROE, while the other independent variable CD has no statistical significant on performance. We therefore recommend that in considering the capital mix/structure of the firms long term financing should be consider first, while CD should be consider last and also proper matching should be carried out between equity and debt.
Author: Mohammed Kakanda
Publisher:
ISBN:
Category :
Languages : en
Pages : 9
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Book Description
Managers of corporate entities are mostly in confrontation with the problem of; what combination of capital structure (equity and debt) will maximize returns and value of their firms? The study, therefore, aims at assessing the effect of capital structure on the financial performance of listed Consumer goods companies in Nigerian. All consumer goods companies quoted on the Nigerian Stock Exchange are considered the population for this study while seven (7) out of these firms whose accounting year-ends 31 December are considered as the sample. Secondary data was utilized from the annual financial reports of the sampled firms from the year 2008-2013, which was obtained from African Financial website and official website of Nigerian Stock Exchange. The study used ex-post facto research design to examine the relationship between independent and dependent variables while controlling for other variables. Descriptive statistics, correlation, and hierarchical multiple regression analyzes were carried out to test the hypotheses developed in the study. The study found that there is a positive and significant relationship between firm's capital structure and corporate financial performance. The study specifically found that short-term debt (STD) has no significance positive effect on return on equity (ROE) while Long-term debt (LTD) has positive relation and significant effect on ROE. The study recommends that firms should consider the mixture of equity and debt since they are major determinants of corporate performance. Authorities concerned should create an enabling business environment for companies (especially those with low capital) so as to have access to long-term debts to finance their operations and improve performance in the shortrun, instead of using high short-term debts to cushions for financing and profitability problems.
Author: Felix Echekoba
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
This study assesses the effect of financial structure on performance of consumer goods firms quoted in Nigerian Stock Exchange. In this study, twenty three (23) out of the twenty seven (27) firms were randomly chosen for the period 1993 to 2013. The study applied earnings per share and return on equity as performance indices. To add to this, total debt to total equity ratio, short term debt to total equity ratio were adopted to measure financial structure while tangibility, firm size, growth and risk were included as control variables capable of influencing performance. The effect of financial structure on performance was analysed using pooled ordinary least square, fixed effect and random effect regression technique. The results of the analysis divulged that financial structure represented by total debt to total equity ratio and short term debt to total equity ratio, negatively affect financial performance of consumer goods firms measured by earnings per share and return on equity. The negative effect of financial structure variables: total debt to total equity ratio and short term debt to total equity ratio tends to buttress that as result of agency conflict, performance of firms that are highly geared are negatively affected. The findings also were in conformity with the proposition of the pecking order theory that firm performance and financial structure are negatively correlated. This study concludes that financial structure has negative effect on financial performance of Nigeria consumer goods firms. In the light of this, we suggests that firm's management should established a debt-equity mix capable of improving financial performance notwithstanding the proxy adopted for assessing performance. Over investment in fixed assets should be discontinued and effective and efficient utilization of fixed assets vehemently upheld.
Author: Samson Olaniyan
Publisher:
ISBN:
Category :
Languages : en
Pages : 32
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Book Description
This paper examines the effects of capital structure on performance of quoted non-financial firms in Nigeria between 1996 and 2014. The study employed both the first and second generation econometrics method of panel unit root test, principal component analysis, and Generalized Method of Moments. Using return on assets returns on equity, price earnings ratio, Tobin's Q, and constructed Performance Index as measures of firm performance and debt ratio as a measure of capital structure. Our result showed that capital structure has a negative and significant relationship with firm performance. The study concluded that the agency cost of the non-financial firms under the Nigerian Stock Exchange is very high and this leads to negative performance.
Author: Oyetade Abisoye Makinde
Publisher:
ISBN:
Category : Business enterprises
Languages : en
Pages : 0
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Book Description
"The research report presents empirical findings on the determinants of capital structure of selected sample population of non-financial firms of Nigeria. The study was based on quantitative research orientation, and descriptive research design. Secondary data was obtained from 2000-2012 Standard and Poor (S&P) Nigeria Stock Exchange’s twenty seven non-financial firms as sample population for the study. … Major research findings of the study revealed the impact of liquidity in the leverage of Nigerian non-financial firms as a result of institutional factors such as size, return, growth, tangibility, liquidity and dividend on firms’ impact and methods of financing. Also, the visibility of static Trade-off Theory as more constant in determining the wave of capital structures of Nigerian non-financial firms. The study concludes by reiterating that even though the selected firms used for the study is not a reflection of all the non-financial firms in Nigeria, however, it asserts that most Nigerian’s non-financial firms experience high leverage and dividend payments to investors (foreign and local) as well as experience low liquidity, which needs to be minimized of avoided. In sum, further empirical research is required, especially with the most recent data of S&P and Fitch’s (2014) global ratings of Nigeria’s economic performance as the leading economy in Africa (Chima, 2014)."--Leaf iii.
Author: Dr. Abolade Akintola Francis
Publisher:
ISBN:
Category :
Languages : en
Pages : 8
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Book Description
This study investigates the capital structure and value of quoted manufacturing firms in Nigeria. Secondary data was obtained from Factbook published by the Nigerian Stock Exchange (NSE) and financial statements of the investigated companies from 2008-2014. A panel regression model was employed to analyze the data. The results showed a significant and positive relationship between capital structure and market price per share of Nigerian quoted manufacturing firms.
Author: Emmanuel Ikechukwu Okoye
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ISBN:
Category :
Languages : en
Pages : 17
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Book Description
This study assessed the impact of the components of Intellectual Capital (Human Capital, Structural Capital, Relational Capital and Innovation Capital) of Companies listed on the Nigerian Stock Exchange with a view to determining their association with financial performance. The study adopted multiple regression analysis in analyzing data collected from annual reports and accounts of the sampled companies to determine the continue effect of intellectual capital on financial performance among the 182 listed companies. Based on this, the study found out that the integrated effect of the components (Human capital, structural capital, relational capital and innovation capital) made about 40% contribution to the variance in financial performance of the companies. The study developed a model for understanding the IC components and their effect on organization financial performance. The application of this is that investment in IC can contribute to over 40% of change in financial performance consequent upon this, it is recommended that Nigerian listed companies should substantially invest in IC to help boost companies' financial configuration.
Author: Marcel Okeke
Publisher:
ISBN:
Category :
Languages : en
Pages : 26
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Book Description
The study examined the effect of capital structure on firm value of selected quoted firms in Nigeria. It adopted long term debt, equity capital, as independent (x) variables of capital structure while Tobin Q was used as proxy for firm value the dependent variable. It adopted ex-post facto research design. The statistical package used for the analysis was e-view version 8.0. The population of the study was firms drawn from conglomerate and consumer goods sectors of Nigeria Stock exchange for a period of nine (9) years 2007-2015. Descriptive statistics, correlation and ordinary least square (OLS) of multiple regression analysis were used to test the hypotheses formulated to guide the study. The coefficient of determination R2 showed that 65% systematic variations in firm value could be explained by the independent variables. The F value (62.44647) was significant at 1% which means that the parameters estimated were statistically significant in explaining the effect of the independent variables on the dependent variable. The study therefore, concluded that capital structure with regard to long term debt was negatively but statistically significant to firm value, while equity capital was positively insignificant to firm value. The study recommended that firms should be more concerned with management of equity capital in business financing since it is more related to the value of the firm.
Author: Felicia Uchehara
Publisher:
ISBN:
Category :
Languages : en
Pages : 12
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Book Description
This paper investigates the influence of Financing Mix (Capital Structure) on Corporate Performance in Nigeria using a disaggregated approach. To carry out this research we employed a disaggregated approach using sample of twenty-seven firms listed on the Nigerian Stock Exchange during the seventeen-year period, 1996- 2013 and a model with the necessary policy variables was constructed. Panel data for the selected firms are generated and analyzed using Ordinary Least Squares (OLS) as a method of estimation. Our result reveals that a firm's capital structure represented by Debt Ratio, DR has a significantly negative impact on the Return on Asset (ROA) and Return on Equity (ROE) (firm's performance proxies). Also the relationship between ROA and firm's asset tangibility is negative and significant at 1% level being wrongly signed, against a priori expectations. This shows that firms with high ratio of tangibility have a lower financial performance ratio. The results also show that the size and growth of firm are correctly signed consistent with Myers and Majluf (1984). The study by these findings indicate consistency with previous empirical studies and provide evidence in support of Agency cost theory. The author recommended among others that firms should identify other relevant factors that influence corporate performance other than debt. Such factors as Corporate governance, quality management, Size of the firm, Tangibility, growth etc. It is also necessary that firms understand their conditions, analyze their debt capacities, look at the need to maintain comparability with firms in the same industry before making the final decision regarding their capital structure; and especially when presented with attractive new growth opportunities.
Author: Felix Echekoba
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
This study examines the impact of financial structure on performance of agricultural and healthcare firms listed in Nigerian Stock Exchange for a period of twenty one (21) years 1993 to 2013. This study selected fifteen (15) out of the sixteen (16) firms listed on agricultural and healthcare sectors. Data were collected from the Nigerian Stock Exchange factbook of various issues as relevant and were analysed using the pooled OLS, fixed, random effect models and the granger causality test. Financial structure was surrogated by total debt to total equity ratio, short term debt to total equity and total debt to total assets ratio while firm performance was measured by return on assets, return on equity, earnings per share and profit before tax. The analysis for the agricultural firms revealed that financial structure significantly impacts on earnings per share but does not impact on return on equity, return on asset and profit before tax. For healthcare firms, financial structure significantly impacts on earnings per share and profit before tax but does not impact on return on equity and return on assets. On the impact of the control variables on performance, it was observed that it is only risk that is significant in determining performance of agricultural firms while tangibility, size, growth and tax are significant factors that impact on performance of healthcare firms. To this effect, we suggests that it is very crucial for firm's management to carefully look at the debt-equity mix, which according to the result of the study, significantly impacts on performance of firms in agricultural and healthcare sectors.
