CAPITAL STRUCTURE

This study examines the impact of capital structure on firm performance among oil and gas firms listed on the Nigerian Exchange Group (NGX) from 2014 to 2023. Given the capital-intensive nature of the industry, understanding the relationship between debt and equity financing is crucial for optimizing financial performance. The study employ sanex-post facto research design, relying on secondary data sourced from annual financial
reports, the NGX database, the Central Bank of Nigeria (CBN), and the National Bureau of Statistics (NBS).
A panel data regression model is used to assess the effect of key capital structure variables—debt-to-equity ratio, debt ratio, equity ratio, and long-term debt to assets ratio—on firm performance, measured through Return on Assets (ROA) and market
value. The study applies descriptive statistics, correlation analysis, and panel regression techniques, using the Hausman test to determine the appropriate model (Fixed Effects or Random Effects). Diagnostic tests are also conducted to ensure the validity and reliability of the regression results.
Findings from the study are expected to provide empirical evidence on how leverage influences financial performance, offering insights for corporate managers, investors, and policymakers in optimizing capital structure decisions. The study contributes to existing literature by incorporating Environmental, Social, and Governance (ESG) considerations, which have gained prominence in corporate financing decisions.

This study examined the effect of capital structure on the financial performance of deposit
money banks with international authorization listed on the Nigerian Exchange Group (NGX).
The study covered seven banks over a six-year period (2018–2023), yielding a total of 42
bank-year observations. Secondary data were extracted from audited annual financial
statements, while financial performance was proxied by Return on Assets (ROA). The capital
structure variables included Total Debt Ratio (TDR), Equity Ratio (ER), Long-Term Debt
(LTD), and Short-Term Debt (STD). Data were analysed using descriptive statistics,
correlation analysis, diagnostic tests, and multiple regression techniques through SPSS 25.
The descriptive statistics revealed that Nigerian deposit money banks rely heavily on debt
financing, particularly short-term debt. Correlation results showed no significant linear
relationship between ROA and the capital structure variables, although strong internal
correlations existed among TDR, ER, and STD. Diagnostic tests confirmed the absence of
multicollinearity, heteroskedasticity, autocorrelation, and non-normality. Due to perfect
multicollinearity between TDR and ER, both variables were excluded from the regression
model, leaving LTD and STD as the final predictors.
The regression results showed that Long-Term Debt (LTD) had a positive but statistically
insignificant effect on financial performance, while Short-Term Debt (STD) exerted a
negative and insignificant effect. The model’s explanatory power was weak (R² = 0.070),
indicating that capital structure accounts for only 7% of variations in bank profitability.
Based on the 5% significance threshold, all hypotheses were accepted, showing that none of
the capital structure variables significantly predicted financial performance during the
period under review.
The study concludes that capital structure does not have a significant effect on the financial
performance of internationally active Nigerian banks, suggesting that profitability in the
banking sector is driven more by operational efficiency, asset quality, regulatory compliance,
and macroeconomic factors than by leverage decisions. The study recommends that bank
managers adopt balanced financing strategies while regulators strengthen policies that
promote sustainable liquidity and risk management.

The study is on the impact of capital structure on the performance of quoted insurance firms in Nigeria. The study adopted the panel data regression method. The outcome of the study revealed that total debt to total assets ratio has a negative significant impact on performance of Nigerian insurance firms, short-term debt to total assets ratio has a positive significant impact on performance of Nigerian insurance firms, long-term debt to total assets ratio has a negative significant impact on performance of Nigerian insurance firms. The study however recommends that in order to continue to be profitable and competitive, top management of every insurance company needs make wise financial decisions. In order to finance their operating activities, listed insurance companies must step up their efforts to rely more on internally generated money.