Effect of Capital Structure on Firm Performance Case Study Nestle Nigeria Plc.
ABSTRACT
The study investigated the effect of capital structure on firm performance with focus on Nestle Nigeria Plc. It specifically find out if there is any relationship between capital structure and firm performance and also determine the extent to which capital structure affect firm performance.
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The scope of the study covered ten years (2008-2017). Data used for this study was purely obtained from secondary sources, particularly from Nestle Nigeria Plc. annual reports of various years i.e. (2008-2017). The data were analysed using regression on Statistical Package for Social Science. Findings from the study showed that debt ratio had a significant effect on firm performance (β1= -1.097, ρ˂0.05).
It showed that asset turnover had insignificant effect on firm performance (β3 = -0.080, ρ˃0.05). Asset tangibility had insignificant and negative effect on firm performance (β4 = -0.623, ρ˃0.05). In line with the finding, it is strongly recommended that firms should take into cognizance the amount of debt incurred because it is a major determinant of firm’s performance.
TABLE OF CONTENTS
CHAPTER ONE: INTRODUCTION
1.1 Background of the Study
1.2 Statement of the Problem
1.3 Research question
1.4 Objectives of the Study
1.5 Research hypothesis
1.6 The significance of the study
1.7 Organization of the Study
CHAPTER TWO: LITERATURE REVIEW
2.1 Conceptual Review
2.1.1 Meaning of Capital Structure
2.1.1 Firm performance
2.1.2 Determinants of Financial Performance
2.1.3 Liquidity
2.1.4 Firm Size
2.1.5 Growth
2.1.6 Profitability
2.2 Theoretical Review
2.2.1 Modigliani and Miller Theorem
2.2.2 Trade-off Theory
2.2.3 Pecking Order Theory
2.3 Empirical Review
2.4 Gaps in Literature
CHAPTER THREE: METHODOLOGY
3.1 Sources of Data
3.2 Method of Data Analysis
3.3 Re-Statement of Hypotheses
3.4 Model Specification
3.4.1 Coefficient of Determination
3.4.2 Standard Error
3.4.3 F-Statistics
3.4.4 Durbin-Watson
CHAPTER FOUR: DATA PRESENTATION AND ANALYSIS
CHAPTER FIVE: SUMMARY, CONCLUSION AND RECOMMENDATIONS
5.1 Summary of Findings
5.2 Conclusion
5.3 Recommendations
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