The Impact of Capital Structure on Firm’s Profitability in Nigeria (A Case Of Listed Manufacturing Firms On The Nigerian Stock Exchange):- Umezinwa, Chijindu J.
ABSTRACT
Capital structure in finance term
means the way a firm finances his assets across the blend of debt, equity or
hybrid securities (Saad, 2010). Funding combination is the most important issue
for'manufacturing firms while they know the amount of capital required. Firms
should be careful regarding the appliance of financial providing methods
compatible with the investment strategy of their firm and profitability. This
study seeks to examine the relationship between capital structure and firm's
profitability and the impact it has on it. For this purpose, 10 manufacturing
companies have been selected randomly as study samples and the financial
statements and. annual reports was gathered from the period of 2008- 2012. In
the study, debt ratio, equity ratio, reserves and profitability ratio were
calculated using their respective formulas and were used as indicators of
capital structure and profitability respectively. Results showed that there was
a significant relationship between reserves and firm’s profitability while debt
financing and equity financing had no significant relationship which means that
the manufacturing companies have established a pecking order theory and the use
of reserves (internal funding) will lead to more profitability.
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CHIJINDU, J (2023). The Impact of Capital Structure on Firm’s Profitability in Nigeria (A Case Of Listed Manufacturing Firms On The Nigerian Stock Exchange):- Umezinwa, Chijindu J.. Repository.mouau.edu.ng: Retrieved Apr 27, 2024, from https://repository.mouau.edu.ng/work/view/the-impact-of-capital-structure-on-firms-profitability-in-nigeria-a-case-of-listed-manufacturing-firms-on-the-nigerian-stock-exchange-umezinwa-chijindu-j-7-2
JESSICA, CHIJINDU. "The Impact of Capital Structure on Firm’s Profitability in Nigeria (A Case Of Listed Manufacturing Firms On The Nigerian Stock Exchange):- Umezinwa, Chijindu J." Repository.mouau.edu.ng. Repository.mouau.edu.ng, 20 Dec. 2023, https://repository.mouau.edu.ng/work/view/the-impact-of-capital-structure-on-firms-profitability-in-nigeria-a-case-of-listed-manufacturing-firms-on-the-nigerian-stock-exchange-umezinwa-chijindu-j-7-2. Accessed 27 Apr. 2024.
JESSICA, CHIJINDU. "The Impact of Capital Structure on Firm’s Profitability in Nigeria (A Case Of Listed Manufacturing Firms On The Nigerian Stock Exchange):- Umezinwa, Chijindu J.". Repository.mouau.edu.ng, Repository.mouau.edu.ng, 20 Dec. 2023. Web. 27 Apr. 2024. < https://repository.mouau.edu.ng/work/view/the-impact-of-capital-structure-on-firms-profitability-in-nigeria-a-case-of-listed-manufacturing-firms-on-the-nigerian-stock-exchange-umezinwa-chijindu-j-7-2 >.
JESSICA, CHIJINDU. "The Impact of Capital Structure on Firm’s Profitability in Nigeria (A Case Of Listed Manufacturing Firms On The Nigerian Stock Exchange):- Umezinwa, Chijindu J." Repository.mouau.edu.ng (2023). Accessed 27 Apr. 2024. https://repository.mouau.edu.ng/work/view/the-impact-of-capital-structure-on-firms-profitability-in-nigeria-a-case-of-listed-manufacturing-firms-on-the-nigerian-stock-exchange-umezinwa-chijindu-j-7-2