Research Article

Capital Structure, Liquidity and Financial Performance of Listed Consumer Goods Companies in Nigeria

Jibril Ramalan1*, Inuwa Jamilu2, Olatoke Taofiq2, Usman Adamu Babayayi2
1 Department of Business Management Federal University, Dutsin-ma Katsina State
2 Department of Business Management Federal University Dutsin-Ma Katsina State.
* Corresponding author: rjibril@fudutsinma.edu.ng
Published: Oct, 2024
DOI: 10.67894/bbr.2024.t9s993ku
Pages: 44-59
Views: 14
Downloads: 11

Abstract

The study examines the moderating effect of liquidity decision on the relationship between capital structure and performance of listed consumer goods companies in Nigeria. The data were extracted from the annual reports and accounts of the companies for a period of 5 years (2018-2022). The study employed ex-post factor research design and Stata version (17) was used in analysing the data. The result shows that TDTA and TDTE are statistically not significant on financial performance measure by ROA. However, the study findings reveal that TDTALIQD, TDTELIQD, FS and FA were found to be significant with ROA at 5% and 1% level of significant in moderated model respectively. Finally, the findings indicated that liquidity decision moderate the relationship between endogenous and exogenous variables because it changes the relationship between direct and indirect result that the direction of the result changed from insignificant to Significant on all the independent variables employed. It is recommended that companies should pay more attention to their liquidity position when making their capital structure because it has significantly influenced its financial performance. While a question should be taken by the management of the companies on employing equity and debt without taking into cognizance of their liquidity position on their capital structure, because any increase in companies’ debt/equity ratio in their capital structure affect their performance insignificantly. 

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How to Cite

Ramalan, J., Jamilu, I., Taofiq, O., & Babayayi, U. A. (2024). Capital Structure, Liquidity and Financial Performance of Listed Consumer Goods Companies in Nigeria. Bayero Business Review, 8(2), 44-59. https://doi.org/10.67894/bbr.2024.t9s993ku

J. Ramalan, I. Jamilu, O. Taofiq, and U. A. Babayayi, "Capital Structure, Liquidity and Financial Performance of Listed Consumer Goods Companies in Nigeria," Bayero Business Review, vol. 8, no. 2, pp. 44-59, October 2024. doi: 10.67894/bbr.2024.t9s993ku

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