ABSTRACT

This study analysed the capital structure and performance differentials in selected livestock investments in Abia State, Nigeria. The selected livestock enterprises for this study were the poultry and piggery enterprises. A multi-stage random sampling technique was used in choosing the sample. Primary data collected from 83 livestock enterprises comprising of 50 poultry enterprises and 33 piggery enterprises were used for the study. Data collected were analyzed using some statistical and econometric tools like frequencies, percentages, averages, independent samples z-test, Maximum Likelihood Stochastic (MLS) regression, multinomial logistic regression technique and multiple regression technique. The findings showed that the mean age of the poultry and piggery enterprises operating in Abia state was 11.53 years and 9.67 years respectively. The findings also showed that 45.3% and 65.8% of the poultry and piggery enterprises respectively are located in the semi-urban areas of the state. The mean number of birds and pigs existed in the poultry and piggery enterprises in the study area were 1153 birds and 52 pigs per farm. Poultry and piggery enterprises operating in Abia state had a mean total current asset of N3,730,696.89 and N4,180,140.09 respectively while their mean total liabilities were N1,213,357.27 and N1,522,751.85 respectively. The composition of the capital structure showed that 70.0% and 66.2% of the poultry and piggery enterprises in Abia state are operated through a combination of equity and debt capital. The Mean income per poultry enterprise per annum was N1,512,477.00 and the Mean income per piggery enterprise per annum was N920,455.00. Rate of return to investment per poultry enterprise per annum was 94.81% while for piggery enterprise it was 37.19%. Comparatively, in terms of profitability analysis, poultry enterprise generates higher profit margins in Abia state than piggery enterprise. Poultry and piggery enterprise in Abia state are liquid, solvent and not highly leveraged. Expected total expenditure requirement of the business, profitability of the enterprise, size of the enterprise, growth of enterprise, business environment, liquidity, the total assets’ turnover, owner’s collateral and age of the enterprise significantly determined the capital structure of the poultry enterprise in Abia state whereas, expected total expenditure requirement of the business, profitability of the enterprise, size of the enterprise, growth of enterprise, liquidity, the total assets’ turnover and age of the enterprise significantly determined the capital structure of the piggery enterprise in Abia state. Size of the enterprise, outstanding debts of the enterprise, business stage, location of the enterprise, scale of operation, amount of savings, access to loan, significantly determined the level of investment in the poultry enterprise in Abia state while size of the enterprise, outstanding debts of the enterprise, business stage, location of the enterprise, scale of operation, amount of savings, access to loan significantly determined the level of investment in the piggery enterprise in Abia state. Credit receivables, amount of savings, cash at hand, trade credits, short-term debt capital and credit payable significantly influenced the performance of poultry enterprise in Abia State, whereas, credit receivables, amount of savings, cash in hand, short-term debt capital, trade credits, and credit payable significantly influenced the performance of piggery enterprise in Abia State. The study recommends that both government and other investors in agriculture should invest in large scale poultry and piggery enterprises in the state which are profitable so as to provide employment opportunity to the masses, make chicken and pork supplies more available as well as generate more funds to run the affairs of the state.