Author:
L.K. Fijabi,S.A. Owolabi,A.T. Ajibade
Abstract
The study examined the effect of equity and debts on the financial performance of the listed consumer goods sector in Nigeria for eleven years (2011 – 2021). Data from the published records of 16 listed companies in the consumer goods sector were used. The dependent variable was proxied by Market price per share (MPS) and return on assets (ROA) while equity and debts were proxied by equity-to-asset ratio, short-term debt-to-asset ratio, and long-term debt-to-asset ratio as independent variables. Data were analysed using descriptive and inferential statistics (panel regression with fixed effects) at α=0.05 level of significance. The results had a significant effect on equity and debt on MPS (Adj. R2 = 0.0708, p < 0.05) and ROA (Adj. R2 = 0.108, p < 0.05). The study concluded that equity and debts affected the financial performance of companies listed in the Nigerian consumer goods sector. The study recommended that managers of listed consumer goods companies should pay attention to funding management, especially equity funds and short-term debt to improve their profitability for sustainable growth.
Publisher
African - British Journals
Reference36 articles.
1. Abdioglu, N. (2019). The impact of firm-specific characteristics on the relation between financial distress and capital structure decisions. Journal of Business Research-Turk, 11(2), 1057-1067.
2. Adebisi, O. S. & Lawal, K. O. (2015). Equity share price determinants: A survey of the literature. Arabian Journal of Business and Management Review, 5(3), 38-44.
3. Ajibola, A., Wisdom, O., & Qudus, O. L. (2018). Capital Structure and financial performance of listed manufacturing firms in Nigeria. Journal of Research in International Business and Management, 5(1), 81-89.
4. Alao, A. A. & Sanyaolu, W. A. (2020). Effect of leverage on the profitability of Nigerian consumer goods manufacturing firms. Izvestiya Journal of Varna University of Economics, 64(1), 1-15.
5. Alhassan, I. & Anwaru Islam, K. M. (2019). Liquidity management and financial performance of listed oil and gas companies in Nigeria. International Journal of Accounting and Finance Review, 8(1), 15-25.