Effects of Capital Structure on Financial Performance of Quoted Manufacturing Firms in Nigeria
Moyinoluwa Esther OLUTAYO
The concept of capital structure has attracted considerable and growing attention among researchers, financial managers, policymakers, and corporate governance scholars, owing to its direct and far-reaching implications on organizational performance. Based on this backdrop, the effects of capital structure on financial performance of quoted manufacturing firms in Nigeria is therefore examined in this study. Manufacturing firms listed on the Nigerian Exchange Group as of December 31st, 2025, made up the study population. Descriptive statistics and Panel Data Regression Analysis was employed to evaluate the data collected between 2016 and 2025. The results confirmed that internal growth rate has a positive and significant effect on financial performance of quoted manufacturing firms in Nigeria; Also, it was discovered from the results that debt to equity ratio has a positive and significant effect on financial performance of quoted manufacturing firms in Nigeria; Furthermore, shareholders equity ratio has a positive and significant effect on financial performance of quoted manufacturing firms in Nigeria; In addition, the result confirmed that firm size has a positive and significant effect on financial performance of quoted manufacturing firms in Nigeria. The study concludes that approximately 81.9 percent of the variation in financial performance (Return on Assets), reflects the joint relevance of capital structure decisions of quoted manufacturing firms in Nigeria. From the findings, the study recommends that corporate managers of quoted manufacturing firms in Nigeria should prioritize the cultivation and preservation of strong internal financing capacity.
Keywords: Manufacturing firms, firm size, shareholders’ equity, debt to equity ratio, internal growth rate, return on assets