PATRICK D. GWA
Department of Accounting,
Akawe Torkula Polytechnic,
Makurdi, Benue State, Nigeria.
e-mail: [email protected]
ABSTRACT
This study examined the impact of capital structure on the profitability of manufacturing firms in Nigeria. A multiple regression of Ordinary Least Square (OLS) analytical technique was used to analyse the data. The study revealed that Long term debt and short term debts have positive impact on the profitability of listed manufacturing firms in Nigeria and were statistically significant. On the other hand, Total debt ratio to total assets and total debt to total equity ratio did not show a significant relationship to the profitability of listed manufacturing firms in Nigeria. The study concluded that there is a positive relationship between capital structure and profitability of listed manufacturing firms in Nigeria. The study recommends that the regulatory authority such as SEC should make it mandatory for listed manufacturing firms in Nigeria to have some optimum level of leverage in their capital structure financing.
Keywords: Capital Structure; profitability; optimum capital mix