Equity and Debts on Financial Performance of Listed Consumer Goods Sector in Nigeria
Publication Date: 02/04/2023
Author(s): Fijabi Lateef Kolawole, Owolabi Sunday Ajao, Ajibade Ayodeji Temitope.
Volume/Issue: Volume 6 , Issue 2 (2023)
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 a nalysed 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. R 2 = 0.0708, p < 0.05) and ROA (Adj. R 2 = 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, especial ly equity funds and short term debt to improve their profitability for sustainable growth.
Keywords:
Capital structure, Equity capital, Financial Performance , Long term debt, Market price per share, Return on assets, Short term debt
