2023 PUBLICATION

THE IMPACT OF FINANCIAL STRUCTURE ON FIRM PERFORMANCE

A STUDY OF CEMENT COMPANIES IN NIGERIA

Abstract

This study assesses the impact of financial structure on firm performance. The primary objective of the study is to examine the impact of financial structure on firm performance using cement companies in Nigeria. The study uses three financial performance measures which include: return on assets (ROA), return on equity (ROE), and return on investment (ROI) as dependent variables. The population of this study consists of 13 cement companies in Nigeria on the basis of availability of information necessary for conducting the study and the readiness of annual financial reports for the period of 10years from 2012-2022. The result portrays that there is a relationship between financial structure and firm performance. It can be concluded that cement companies are majorly financed by mixing of equity and short term financing. The study recommends that companies should depend very small on current debt which formed the major part of their leverage and focus more on developing strategies that can improve their financial performance.

Keywords: Capital structure, Capital Structure Decision, Optimal Capital Structure, Return on Assets, Return on Equity and Return on Investment.

Authors:

Sagir Lawal (PhD.)

Abubakar Aliyu Alhaji