ABSTRACT

In recent times there exist a controversy between the relationship that exist between Capital structure and financial performance and this has led to this research work aimed at examining the effect of Capital structure on the financial performance of listed manufacturing firms in Nigeria. The research formulated the specific objectives such as; determining the effect of Capital Structure on return on asset of listed manufacturing firms in Nigeria, ascertaining the extent to which Capital Structure affects the return on equity of listed manufacturing firms in Nigeria and determines the effect of Capital Structure on Profit after tax of listed manufacturing firms in Nigeria. Thus various research questions and hypothesis were formulated in accordance with the specific objectives. This study adopted the ex-postfacto research design and it restricts itselfto manufacturingfirms listed on the Stock exchange ofwhich 3 Manufacturing firms we're selected based on availability of data. Analysis on the data was done using the panel unit root test. The analysis made the following findings that Capital Structure has a significant effect on return on asset oflisted manufacturingfirms in Nigeria, that there is significant effect on Capital Structure on the return on equity on listed manufacturing firms in Nigeria and Capital Structure has significant effect on Profit after tax on listed manufacturing firms in Nigeria. The study therefore concludes that Capital Structure has significant effect on Financial Performance of listed manufacturing firms in Nigeria. The research made the following recommendation; Management offirms should continue to apply funds on assets that would yield revenue in operations to guarantee return on asset, Management of listed firms should invest in strategic projects that would generate return to shareholders.