Capital Structure and Financial Performance of Listed Oil and Gas and Consumer Goods Firms in Nigeria: A Comparative Panel Analysis (2011–2020)

This study examines the effect of capital structure on the financial performance of listed oil and gas and consumer goods firms in Nigeria over the period 2011-2020. Secondary data were extracted from the annual reports and financial statements of ten listed firms (five from each sector) on the Nigerian Exchange Group (NGX). Descriptive statistics, Pearson correlation, panel unit root, Pedroni cointegration, and panel least squares regression analyses were conducted using E-Views 9.0. For oil and gas firms, short-term debt ratio (STDR) had a positive and significant effect on return on assets (ROA), while long-term debt ratio (LTDR), total debt ratio (TDR), and debt-to-equity ratio (DTER) had positive but insignificant effects. For consumer goods firms, LTDR had a positive and significant effect on ROA, while DTER and STDR had negative and significant effects. TDR had a negative and insignificant effect in both sectors. The study concludes that capital structure exerts a sector-dependent effect on financial performance. This study provides a comparative sectoral analysis of the capital structure-performance nexus in Nigeria, addressing a gap in the literature where most prior studies focused on single sectors. It also provides evidence on the differential effects of debt maturity structure across sectors. Oil and gas firms should optimise short-term debt utilisation, while consumer goods firms should reduce reliance on short-term and debt-to-equity financing and increase equity financing.