DEBT STRUCTURE AND FINANCIAL PERFORMANCE OF LISTED MANUFACTURING GOODS FIRMS IN NIGERIA

Abstract

This study investigated debt structure and financial performance of listed industrial goods firms in Nigeria. The sample size for the study consisted of thirteen (13) listed industrial goods firms in Nigeria. The study used secondary data collection method. The secondary data were obtained from the listed industrial goods firm’s annual reports and accounts. Data were analyzed using descriptive and Pearson correlation coefficient statistical tools with the aid of statistical package for social sciences. The findings reveal that debt capital was found to have very strong relationship with return on asset. Also, debt capital had significant and positive impact on return on equity of listed industrial goods firms in Nigeria. Based on the findings, it was concluded that debt capital structure significantly affects financial performance. Therefore, the study recommends that when capital is raised through debt instruments, more focus should be channeled towards other areas for performance enhancement instead of relying on returns from owners’ capital employed alone. Finally, Management should strive to improve on the ratio of assets to its liabilities