Accounting analyses of capital structure and firms' performance : stylized facts from Nigeria

Анотація

This study undertakes accounting analyses of capital structure and firms' performance in Nigeria using a stratified random sampling to select 31 manufacturing firms with their audited financial statement and quoted on the floor of the Nigerian Stock Exchange (NSE). We follow a guideline of accounting analyses and our strategy of evaluation revolves various measures of capital structure and financial performance ratios; our results show five stylized facts thus; most manufacturing firms in Nigeria engaged in over-trading activities cum capital mismatching; about sixty percent are lowly geared; both the current and acid-test ratios tapper together; market capitalizations of shareholders' funds are maximized and agency costs are reduced; bankruptcy rate in Nigeria manufacturing firms are high.The findings of this study deemed to benefit the external investors and share/stakeholders in guiding their proper decision making; professional managers would be better informed to understand the factors empirically driving the level of performance; the present and future government also be guided on how to strengthen the firms by providing enabling environment and explore their financing options to achieve better performance for a sustainable development and academicians who will see new empirical evidence in the accounting literature emanating from an emerging economy like Nigeria.

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