Capital Structure and Firm Performance in the Nigerian Cement Industry

Gambo, EL-Maude Jibreel; Abdul-Rahman, Ahmad; Ahmad, Mohammed Musa

doi:10.14738/abr.46.2367

Cited by 9 publications

(6 citation statements)

References 22 publications

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“…The result from Table 3 shows that capital structure has a significant statistical impact on financial performance, ROA, and ROE. This is supported by many previous studies (Shamsuddin, et al, 2018;Gambo et al 2016;Akingunola & Olaniyan, 2018;Risfandy, 2018;Ashraf et, al. 2017;Basit & Hassan, 2017) which stated that an increase in the capital structure has a significant impact on their performance.…”

Section: Evidence Insupporting

confidence: 87%

Analysis of Capital Structure and Financial Performance in the Jordanian Insurance Sector

Shamsuddin

Kamel

Daud

et al. 2020

HSSR

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Purpose of the study: This paper aims to examine the impact of capital structure and financial performance of listed insurance companies in Jordon. Methodology: This study used secondary data that was collected from Amman stock exchange and annual report of the selected insurance companies from the year 2007-2017. The static panel data analysis technique is used to examine the impact of capital structure on firm’s performance. The capital structure is measured using short-term debt, long-term debt, and equity financing. Whereas financial performance is measured using Return on Asset (ROA), Return on equity (ROE), and Tobin’s Q. Main Findings: The study findings suggest that capital structure influence the profitability of the listed insurance firms in Jordan. The results also reveal a signiﬁcantly positive relation between long-term debt to total assets to profitability indicators, namely, return on assets (ROA), return on equity (ROE) and Tobin’s Q. On the other hand, the results also reveal a short-term debt has a significant positive relationship with return on equity (ROE) and returns on assets (ROA). However, a relationship between short-term debt and Tobin’s Q is not statistically significant. Applications of this study: The result of this study may assist the insurance sector in Jordon in making decisions regarding capital structure, which is to significantly rely on equity financing or debt financing to reduce financing risk such as agency cost that borne by the equity holders of the Jordanian insurance firms. Novelty/Originality of this study: The study noted that insurance firms generally play a crucial role in the economic development of every country. This study provides evidence that Jordanian insurance firms need to diversify their sources of financing and not rely significantly on debt financing, as the results prove that equity financing is a profitable source of financing.

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Section: Evidence Insupporting

confidence: 87%

Analysis of Capital Structure and Financial Performance in the Jordanian Insurance Sector

Shamsuddin

Kamel

Daud

et al. 2020

HSSR

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“…Often, listed companies in Nigeria do found it difficult to make a profit; this does affect their performance which may be attributed to inadequate finance or where the finance is available at a cost too expensive (Akintoye, 2016;Lambe, 2014;Akinyomi and Olagunju, 2013;Salawu, 2009). The problem of capital structure, therefore, arises from determining the quantum of each source of finance that will yield optimum return with little risks (Akintoye, 2016;Dada and Ghazali, 2016;Gambo et al, 2016).…”

Section: Introductionmentioning

confidence: 99%

Capital structure and financial performance of listed manufacturing firms in Nigeria

Ajibola¹,

Wisdom²,

Ol³

2018

J. Res. Int. Bus. Manag

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This study examined the impact of capital structure on financial performance of quoted manufacturing firms in Nigeria over the period 2005-2014. Panel methodology was applied to analyse the impact of capital structure on financial performance of quoted manufacturing firms in Nigeria. The findings of the panel ordinary least square show that a positive statistically significant relationship exist between long term debt ratio(LTD) (0.0001), total debt ratio (TD) (0.0065) and return on equity (ROE) while a positive statistically insignificant relationship between ROE (return on equity) and STD (Short term debt ratio). There was also a negative insignificant relationship between all the proxies of capital structure (LTD, STD and TD) and ROA which makes ROE a better measure of performance. The study concluded that capital structure has a positive impact on financial performance and companies should employ more of long term debts. Therefore it recommends that every firm should make good capital structures decision to earn profit and carry on their business successfully.

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“…Capital structure has been observed as one of the important factors that affect a firm's financial performance (Gambo, Ahmad, & Ahmad, 2016).…”

Section: Capital Structure and Firm Financial Performancementioning

confidence: 99%

The Impact of Capital Structure and Ownership Structure on Financial Performance: A Study on the KSE 100 Listed Firms in the Pakistan Stock Exchange

Shah¹,

Ahmed²,

Khan³

2022

JAFEE

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Purpose: This research study aimed to examine the impact of capital structure and ownership structure on the financial performance of KSE-100 index firms on the Pakistan Stock Exchange. Design/Methodology/Approach: 100 listed companies have been selected as sample for the study but due to data limitations, 90 companies' annual data has been used for 2009-2018. Ordinary least square regression was used on the panel data for analysis. Two measures of capital structure (debt-to-equity ratio and debt to total assets) while three measures of ownership structure (Foreign ownership, Institutional ownership, and managerial ownership) have been used to determine their impact on three financial performance measures (return on assets, return on equity, and Tobin's). Findings: The results of this study showed that there is a significant negative relationship between financial performance and capital structure. Ownership structure and firm financial performance showed a significant positive relationship when measured on the basis of foreign ownership and institutional ownership while insignificant and negatively related to managerial ownership. Implications: This study suggests that organizations should take financing decisions in accordance with optimum capital structure because more debt decreases financial performance. Furthermore, a decision should be taken the encouragement of foreign and institutional shareholding, while the level of managerial ownership should be lessened to enhance financial performance

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Capital Structure and Firm Performance in the Nigerian Cement Industry

Cited by 9 publications

References 22 publications

Analysis of Capital Structure and Financial Performance in the Jordanian Insurance Sector

Analysis of Capital Structure and Financial Performance in the Jordanian Insurance Sector

Capital structure and financial performance of listed manufacturing firms in Nigeria

The Impact of Capital Structure and Ownership Structure on Financial Performance: A Study on the KSE 100 Listed Firms in the Pakistan Stock Exchange

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