EZEMONYE-OKWARA, FRANKLIN CHIBUIKE (2026) EFFECT OF CAPITAL STRUCTURE ON PROFITABILITY OF QUOTED MANUFACTURING FIRMS IN NIGERIA (2010-2024). Other thesis, GODFREY OKOYE UNIVERSITY, ENUGU.
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Abstract
This study examines the effect of capital structure on the profitability of quoted manufacturing firms in Nigeria from 2010 to 2024. Manufacturing firms in Nigeria operate in a challenging macroeconomic environment characterized by high interest rates, exchange-rate volatility, inflationary pressures, and frequent supply-chain disruptions, all of which significantly influence capital structure decisions and profitability outcomes. Despite the growing body of research in this area, empirical evidence remains inconclusive, particularly regarding the separate effects of shortterm debt, long-term debt, and total debt on firm profitability. The study specifically investigates the effects of short-term debt ratio (STDR), long-term debt ratio (LTDR), and total debt ratio (TDR) on profitability, measured using return on assets (ROA), return on equity (ROE), and net profit margin (NPM). An ex-post facto research design was adopted, utilizing secondary time-series data sourced from the Central Bank of Nigeria Statistical Bulletin and World Bank Development Indicators for the period 2010–2024. Multiple regression analysis was conducted using E-views version 12 econometric software. The study is grounded in the Trade-Off Theory and Pecking Order Theory, which provide frameworks for understanding how Nigerian manufacturing firms prioritize financing sources and how these choices influence profitability. The findings reveal that short-term debt ratio (STDR) has a significant negative effect on ROA and NPM, indicating that over-reliance on short-term financing erodes profitability. Long-term debt ratio (LTDR) shows a positive but statistically insignificant relationship with ROE, while total debt ratio (TDR) exerts a significant negative influence on overall firm profitability. These results suggest that excessive leverage, particularly short-term debt, undermines the financial performance of Nigerian manufacturing firms. *The study recommends that financial managers adopt optimal capital structures that minimize dependence on costly short-term debt while leveraging long-term financing strategically. Policymakers and regulators are advised to create an enabling environment that reduces borrowing costs and encourages long-term investment financing. These findings provide empirical guidance for investors, financial managers, and regulators in formulating financing strategies that enhance firm performance and support sustainable growth in Nigeria's manufacturing sector.
| Item Type: | Thesis (Other) |
|---|---|
| Subjects: | H Social Sciences > H Social Sciences (General) |
| Divisions: | Faculty of Management and Social Sciences |
| Depositing User: | CHIBUEZE EZE |
| Date Deposited: | 03 Aug 2026 12:56 |
| Last Modified: | 03 Aug 2026 12:56 |
| URI: | http://eprints.gouni.edu.ng/id/eprint/6160 |
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