ABSTRACT
The study examined effect of
capital structure on financial performance of deposit money banks in Nigeria.
It adopted ex post facto research design and utilized secondary data obtained
from a cross section of 4 banks from 2007 to 2018. The study formulated three
hypotheses based on each specific objective. Based on the cross section and
time series engaged, panel unit root test was carried out to and found that
long term debt had order of integration at first difference while the other
variables were integrated at level. The study employed panel regression method
of data estimation was employed to evaluate the relationship of the variables
specifically the pooled mean ARDL technique. The study has both long and short
run implication between capital structure and financial performance proxies. In
the long run, long term debts have positive significant relationship with
profit after tax while equity has positive insignificant relationship with
profit after tax. In the short run, long term debts have negative significant
effect on profit after tax while equity has positive significant effect of
profit after tax. The study ascertained that there is significant effect of
capital structure on profit after tax of banks in Nigeria. On the relationship
between capital structure and return on assets, long term debts have negative
significant effect on return on assets in the long run while equity has
positive significant effect on return on assets of banks in the long run. In
the short run, long term debts have negative insignificant effect on return on
assets while equity has positive insignificant effect on return on assets of
banks. The study found that effect of capital structure on return on assets of
banks in Nigeria is not significant. Long term debts have negative
insignificant relationship with return on equity while equity has positive
significant effect on return on equity of banks in the long run. In the short
run, both long term debts and equity have positive insignificant effect on
return on equity of banks. From the hypotheses tested, capital structure has
significant effect on both profits after tax and return on equity of banks in
Nigeria while it has no significant effect on return on assets deposit money
banks in Nigeria. The study therefore concludes that capital structure has
significant effect on financial performance of banks in Nigeria.
UKAEGBU, C (2021). Effect Of Capital Structure On Financial Performance Of Listed Firms In Nigeria. Mouau.afribary.org: Retrieved Nov 27, 2024, from https://repository.mouau.edu.ng/work/view/effect-of-capital-structure-on-financial-performance-of-listed-firms-in-nigeria-7-2
CHIDUMA, UKAEGBU. "Effect Of Capital Structure On Financial Performance Of Listed Firms In Nigeria" Mouau.afribary.org. Mouau.afribary.org, 22 Jul. 2021, https://repository.mouau.edu.ng/work/view/effect-of-capital-structure-on-financial-performance-of-listed-firms-in-nigeria-7-2. Accessed 27 Nov. 2024.
CHIDUMA, UKAEGBU. "Effect Of Capital Structure On Financial Performance Of Listed Firms In Nigeria". Mouau.afribary.org, Mouau.afribary.org, 22 Jul. 2021. Web. 27 Nov. 2024. < https://repository.mouau.edu.ng/work/view/effect-of-capital-structure-on-financial-performance-of-listed-firms-in-nigeria-7-2 >.
CHIDUMA, UKAEGBU. "Effect Of Capital Structure On Financial Performance Of Listed Firms In Nigeria" Mouau.afribary.org (2021). Accessed 27 Nov. 2024. https://repository.mouau.edu.ng/work/view/effect-of-capital-structure-on-financial-performance-of-listed-firms-in-nigeria-7-2