Original Research Article | OPEN ACCESS
Capital Structure and Firm Financial Performance

G. E. Oyedokun1 , K. A. Job-Olatuji2, W. A. Sanyaolu3

1School of Business & Public Policy Saint Monica University, Buea, Cameroon; 2Department of Accountancy D.S Adegbenro, ICT Polytechnic, Itori- Ewekoro, Ogun State, Nigeria; 3Department of Accounting Crescent University, Abeokuta, Nigeria.

For correspondence:-  G. Oyedokun   Email: goyedokung@smuedu.org

Received: 1 March 2018        Accepted: 29 March 2018        Published: 31 March 2018

Citation: Oyedokun GE, Job-Olatuji KA, Sanyaolu WA. Capital Structure and Firm Financial Performance. Account Tax Rev 2018; 2(1):56-71 doi:

© 2018 The authors.
This is an Open Access article that uses a funding model which does not charge readers or their institutions for access and distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0) and the Budapest Open Access Initiative (http://www.budapestopenaccessinitiative.org/read), which permit unrestricted use, distribution, and reproduction in any medium, provided the original work is properly credited..


Capital structure is important in the business affairs of any going concern entity as is it the overall source of finance used by a company in financing its operations and has been considered as one of the most important factors in firm financing policy due to its crucial role in corporate performance. The study sought to examine the effect of capital structure on the financial performance of firms in Nigerian manufacturing sector. The population of the study was all the listed manufacturing companies listed on the Nigerian Stock Exchange, a sample of 10 listed companies was selected. The research design adopted was ex-post facto using four models to analyse the impact of capital structure on firms’ performance. The study used balanced panel data of 100 observations from the 10 listed companies for the periods ranging from 2007 - 2016. Descriptive statistics and regression were used as tools of analysis. The study reveals that there are statistically significant and non- significant effects of capital structure on performance variables. Finally, the study recommends that manufacturing companies should adopt balanced capital structure strategy that will optimise company’s performance and corporate value.

Keywords: Capital Structure, Shareholders’ Wealth, Firms Performance, Profitability, Manufacturing Companies

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