FIRM PERFORMANCE ATTRIBUTES AND CAPITAL STRUCTURE OF LISTED CONSUMER GOODS COMPANIES IN NIGERIA

Abstract

One of the fundamental causes of corporate distress points to the fact that inadequate and inappropriate capital mix characterize the Nigerian firms. Therefore, this study examined the effect of firm performance attributes on capital structure of listed consumer goods companies in Nigeria for the period 2013 to 2023 financial years. The study employed ex- post facto research design and purposive sampling technique was used to select 13 listed consumer goods firms out of study’s population of 20 listed consumer goods firms. Data were sourced from the Annual Report and Accounts of sampled firms. Descriptive statistics, Correlation analysis and Generalised Method of Moments (GMM) of multiple regression methods were employed in the study. The results revealed that profitability (t-val= -18.2069, P<0.05) had a negative and significant influence on the capital structure while liquidity had a positive and significant influence on the capital structure ( t-val= 29.8059 (, P<0.05). This finding indicated that firms with higher liquidity tend to have a higher debt-to-equity ratio. The study concluded that profitability and liquidity are among the major drivers of capital structure of consumer goods firms in Nigeria. The study recommended among others that the management of consumer goods firm should prioritize the improvement and proper management of their profitability and liquidity level. By focusing on these areas, consumer goods companies can position themselves for greater financial stability and expansion opportunities.