IMPACT OF CAPITAL STRUCTURE ON FINANCIAL PERFORMANCE OF LISTED INDUSTRIAL GOODS COMPANIES IN NIGERIA

ABSTRACT The study examines the impacts of capital structure on financial performance of listed industrial goods companies in Nigeria covering the period of sixteen (16) years from 2003 to 2018. The study adopted ex post facto research design and made use of panel data. The study had a population of fourteen (14) listed industrial goods companies in Nigeria on the Nigerian Stock Exchange as at 31st December, 2018 where it sampled eight (8) companies who were consistently active on the floor of the Nigerian Stock Exchange from 2003 to 2018. Data were collected and analyzed using multiple regressions analyses. The findings showed that long term debt to total assets (LTTA) and short-term debt to total assets (STTA) had negative and significant impact on financial performance. While total debt to total assets (TDTA) and total debt to total equity (TDTE) had positive and significant impact on financial performance of listed industrial goods companies in Nigeria. The study concludes that capital structure has impact on financial performance of listed industrial goods companies in Nigeria and therefore, recommends among others that the management in collaboration with shareholders of industrial goods companies in Nigeria should agree on the use of mixture of both debts such as long term debt and short term debt, as well as equity sources in their capital structure mix, as this will reduce the overall cost of capital as a result of its tax advantage, and thereby increase sound financial performance of listed industrial goods companies in Nigeria. Keywords: Capital structure, leverage, performance, Debt, Asset, Equity