Gusau Journal of Accounting and Finance, Vol. 3, Issue 3, October, 2022 i Gusau Journal of Accounting and Finance (GUJAF) Vol. 3 Issue 3, October, 2022 ISSN: 2756-665X A Publication of Department of Accounting and Finance, Faculty of Management and Social Sciences, Federal University Gusau, Zamfara State -Nigeria Gusau Journal of Accounting and Finance, Vol. 3, Issue 3, October, 2022 ii © Department of Accounting and Finance Vol. 3 Issue 3 October, 2022 ISSN: 2756-665X A Publication of Department of Accounting and Finance, Faculty of Management and Social Sciences, Federal University Gusau, Zamfara State -Nigeria All Rights reserved Except for academic purposes no part or whole of this publication is allowed to be reproduced, stored in a retrieval system or transmitted in any form or by any means be it mechanical, electrical, photocopying, recording or otherwise, without prior permission of the Copyright owner. Published and Printed by: Ahmadu Bello University Press Limited, Zaria Kaduna State, Nigeria. Tel: 08065949711, 069-879121 e-mail: abupress2013@gmail.com abupress2020@yahoo.com Website: www.abupress.com.ng mailto:abupress2013@gmail.com mailto:abupress2020@yahoo.com http://www.abupress.com.ng/ Gusau Journal of Accounting and Finance, Vol. 3, Issue 3, October, 2022 iii EDITORIAL BOARD Editor-in-Chief: Prof. Shehu Usman Hassan Department of Accounting, Federal University of Kashere, Gombe State. Associate Editor: Dr. Muhammad Mustapha Bagudo Department of Accounting, Ahmadu Bello University Zaria, Kaduna State. Managing Editor: Umar Farouk Abdulkarim Department of Accounting and Finance, Federal University Gusau, Zamfara State. Editorial Board Prof.Ahmad Modu Kumshe Department of Accounting, University of Maiduguri, Borno State. Prof Ugochukwu C. Nzewi Department of Accounting, Paul University Awka, Anambra State. Prof Kabir Tahir Hamid Department of Accounting, Bayero University, Kano, Kano State. Prof. Ekoja B. Ekoja Department of Accounting, University of Jos. Prof. Clifford Ofurum Department of Accounting, University of PortHarcourt, Rivers State. Prof. Ahmad Bello Dogarawa Department of Accounting, Ahmadu Bello University Zaria. Prof. Yusuf. B. Rahman Department of Accounting, Lagos State University, Lagos Stat Gusau Journal of Accounting and Finance, Vol. 3, Issue 3, October, 2022 iv Prof. Suleiman A. S. Aruwa Department of Accounting, Nasarawa State University, Keffi, Nasarawa State. Prof. Muhammad Junaidu Kurawa Department of Accounting, Bayero University Kano, Kano State. Prof. Muhammad Habibu Sabari Department of Accounting, Ahmadu Bello University, Zaria. Prof. Okpanachi Joshua Department of Accounting and Management, Nigerian Defence Academy, Kaduna. Prof. Hassan Ibrahim Department of Accounting, IBB University, Lapai, Niger State. Prof. Ifeoma Mary Okwo Department of Accounting, Enugu State University of Science and Technology, Enugu State. Prof. Muhammad Aminu Isa Department of Accounting, Bayero University, Kano, Kano State. Prof. Ahmadu Bello Department of Accounting, Ahmadu Bello University, Zaria. Prof. Musa Yelwa Abubakar Department of Accounting, Usmanu Danfodiyo University, Sokoto State. Prof. Salisu Abubakar Department of Accounting, Ahmadu Bello University Zaria, Kaduna State. Dr. Isaq Alhaji Samaila Department of Accounting, Bayero University, Kano State. Prof. Fatima Alfa Department of Accounting, University of Maiduguri, Borno State. Gusau Journal of Accounting and Finance, Vol. 3, Issue 3, October, 2022 v Dr. Sunusi Sa'ad Ahmad Department of Accounting, Federal University Dutse, Jigawa State. Dr. Nasiru A. Ka’oje Department of Accounting, Usmanu Danfodiyo University Sokoto State. Dr. Aminu Abdullahi Department of Accounting, Usmanu Danfodiyo University Sokoto, State. Dr. Onipe Adebenege Yahaya Department of Accounting, Nigerian Defence Academy, Kaduna State. Dr. Saidu Adamu Department of Accounting, Federal University of Kashere, Gombe State. Dr. Nasiru Yunusa Department of Accounting, Ahmadu Bello University Zaria. Dr. Aisha Nuhu Muhammad Department of Accounting, Ahmadu Bello University Zaria. Dr. Lawal Muhammad Department of Accounting, Ahmadu Bello University Zaria. Dr. Farouk Adeiza School of Business and Entrepreneurship, American University of Nigeria, Yola. Dr. Bashir Umar Farouk Department of Economics, Federal University Gusau, Zamfara State. Dr Emmanuel Omokhuale Department of Mathematics, Federal University Gusau, Zamfara. State Gusau Journal of Accounting and Finance, Vol. 3, Issue 3, October, 2022 vi ADVISORY BOARD MEMBERS Prof. Kabiru Isah Dandago, Bayero University Kano,Kano State. Prof A M Bashir, Usmanu Danfodiyo University Sokoto, Sokoto State. Prof. Muhammad Tanko, Kaduna State University, Kaduna. Prof. Bayero A M Sabir, Usmanu Danfodiyo University Sokoto, Sokoto State. Prof. Aliyu Sulaiman Kantudu, Bayero University Kano, Kano State. Editorial Secretary Usman Muhammad Adam Department of Accounting and Finance, Federal University Gusau, Zamfara State. Gusau Journal of Accounting and Finance, Vol. 3, Issue 3, October, 2022 vii CALL FOR PAPERS The editorial board of Gusau Journal of Accounting and Finance (GUJAF) is hereby inviting authors to submit their unpublished manuscript for publication. The journal is published in two issues of April and October annually. GUJAF is a double-blind peer reviewed journal published by the Department of Accounting and Finance, Faculty of Management and Social Sciences, Federal University Gusau, Zamfara State Nigeria The Journal accepts papers in all areas of Accounting and Finance for publication which include: Accounting Standards, Accounting Information System, Financial Reporting, Earnings Management, , Auditing and Investigation, Auditing and Standards, Public Sector Accounting and Auditing, Taxation and Revenue Administration, Corporate Governance Issues, Corporate Social Responsibility, Sustainability and Environmental Reporting Issue, Information and Communication Technology Issues, Bankruptcy Prediction, Corporate Finance, Personal Finance, Merger and Acquisitions, Capital Structure, Working Capital Management, Enterprises Risk Management, Entrepreneurship, International Business Accounting and Finance, Banking Crises, Bank’s Profitability, Risk and Insurance Issue, Islamic Finance, Conventional and Islamic Banks and so forth. 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Finally, manuscript should be send to our email address elfarouk105@gmail.com and a copy to our website on journals.gujaf.com.ng mailto:elfarouk105@gmail.com http://www.gujaf.com.ng/ Gusau Journal of Accounting and Finance, Vol. 3, Issue 3, October, 2022 viii PUBLICATION PROCEDURE After receiving a manuscript that is within the similarity index threshold, a confirmation email will be send together with a request to pay a review proceeding fee. At this point, the editorial board will take a decision on accepting, rejecting or making a resubmission of the manuscript based on the outcome of the double-blind peer review. Those authors whose manuscript were accepted for publication will be asked to pay a publication fee, after effecting all suggested corrections and changes made on the manuscript. All corrected papers returned within the specified time frame will be published in that issue. PAYMENT DETAILS Bank: FCMB Account Number: 7278465011 Account Name: Gusau Journal of Accounting and Finance FOR INQUIRY The Head, Department of Accounting and Finance, Federal University Gusau, Zamfara State. elfarouk105@gmail.com +2348069393824 FOR MORE INFORMATION, CONTACT The Editor-in-Chief on +2348067766435 The Associate Editor on +2348036057525 OR visit our website on www.gujaf.com.ng or journals.gujaf.com.ng mailto:elfarouk105@gmail.com mailto:05@gmail.com http://www.gujaf.com.ng/ http://www.gujaf.com.ng/ Gusau Journal of Accounting and Finance, Vol. 3, Issue 3, October, 2022 ix CONTENTS Capital Structure and Firm Financial Performance of Listed Deposit Money Banks in Nigeria: Moderating Effect of Board Financial Literacy Anas Idris Abdulwahab, Hussaini Bala Ph.D, Mansur Lubabah Kwambo Ph.D, & Abubakar Adamu 1 Influence of Socialization On MSME Compliance by Mediating Understanding and Moderating Knowledge of Tax Visits Yayuk Ngesti Rahayu 17 Does International Financial Reporting Standard Narrows Audit Expectation Gap? Musa Ibrahim Dauda, Ibrahim Adagye Dauda, PhD 35 Sustainability Reporting and Financial Performance of Listed Manufacturing Firms in Nigeria Aiyesan, Olabode Olutola Ph.D 49 Firm Attributes and Financial Reporting Timeliness of Listed Consumer Goods Firms in Nigeria Akume James Terkende, Dele Ikese Karim 67 Value Relevance of Accounting Information for Listed Financial Service Firms in Nigeria Kassim Busari, Ishaya Luka Chechet Ph.D, Aliyu Ahmed Abdullahi Ph.D, & Ibrahim Mohammed Ph.D 87 Nigeria Economic Growth and Capital Market Development: Does Contributory Pension Scheme Matter? Akinwumi Ayorinde Olutimi, Toluwa Celestine Oladele Ph.D, &Adeboye Emmanuel Sanmi 101 Audit Committee and Financial Reporting Quality: The Moderating Effect of Board Independence of Listed Deposit Money Banks in Nigeria Kassim Yusha’u Shika, Mark David Kantiyok 117 Gusau Journal of Accounting and Finance, Vol. 3, Issue 3, October, 2022 x Determinants of Financial Performance of Listed Deposit Money Banks in Nigeria Mary Seansu Lazarus, Nurradden Usman Miko Ph.D, & Saifulahi Abdullahi Mazadu Ph.D 140 Human Resource Accounting and Profitability of Listed DepositMoney Banks in Nigeria Ahmad Adamu Ibrahim, Ahmad Rufa’I Adamu, Fatihu Mahmud Alhassan &Muhammad Iliyas Abdulsalam 158 Board Independence, Audit Effectiveness and The Quality of Reported Earnings in The Nigerian Consumer Goods Firms Isah Shittu Ph.D, Misbahu, Abubakar Muhammad 175 Impact of Capital Structure On Financial Performance of Listed Agricultural Companies in Nigeria Ahmad Muhammad Ahmad, Shehu Usman Hassan Ph.D., &Abubakar Abubakar 192 Trade Oriented Money Laundering and Era of Cybersecurity Tax Evasion in Nigeria Oluwayemi Joseph Kayode, Adewole Joseph Adeyinka Ph.D, Adewale Abass Adekunle & Kadiri Kayode Ph.D 205 Effect of Females in the Boardroom on Corporate Sustainability Reporting Salami Suleiman Ph. D, Olanrewaju Atanda Aliu Ph.D 224 Gusau Journal of Accounting and Finance, Vol. 3, Issue 3, October, 2022 192 IMPACT OF CAPITAL STRUCTURE ON FINANCIAL PERFORMANCE OF LISTED AGRICULTURAL COMPANIES IN NIGERIA Ahmad Muhammad Ahmad Department of Accounting, Nigerian Army University Biu. +2348060305681, shaktarmakarfimail@gmail.com Shehu Usman Hassan Ph.D. Professor of Accounting and Finance Department of Accounting, Federal University of Kashere, Gombe State. +2348067766435 shehuhassanusman@gmail.com Abubakar Abubakar Department of Accounting, Federal University of Kashere, Gombe State. +2347030072314 abubakarabubakar2020@gmail.com Abstract A company is usually faced with the challenge of financing investments; the management is to decide on the optimal mix of capital structure decision. This study sets to investigate the influence that capital structure of a firm has on financial performance of listed manufacturing firms in Nigeria for period spanning from 2017-2021. The dependent variable of the study is financial performance proxy by return on asset (ROA) while the independent variable of the study is capital structure proxy by long-term debt, short term debt, total debt ratio and total equity ratio. The population of the study consist of all the 5 listed manufacturing firms in Nigeria and the sampling technique was the census arriving at a 25 firm year observations. The multiple regressions was employed for the data analysis and the study revealed that long-term debt ratio has a negative insignificant relationship with return on asset while short-term debt, total debt ratio and total equity ratio have positive significant influence on return on asset. The study recommends that the management of listed manufacturing firms in Nigeria should pay attention in curtailing long-term debt and improving on short term debts in order to improve financial performance. Keywords: long-term debt, short term debt, total debt ratio, total equity ratio and return on asset DOI: https://doi.org/10.57233/gujaf. v3i3.189 1. Introduction Capital structure of a firm is the mix between debt and equity. Capital structure of a firm is the way in which the assets of the firm are financed. The firm may finance operations either by equity only or may decide to finance by both equity and debt mailto:shaktarmakarfimail@gmail.com mailto:shehuhassanusman@gmail.com mailto:n@gmail.com mailto:abubakarabubakar2020@gmail.com https://doi.org/10.57233/gujaf.%20v3i3.189 Gusau Journal of Accounting and Finance, Vol. 3, Issue 3, October, 2022 193 financing. Capital structure is concerned with the mix of the sources of funds available to the firm to fund business operations and fund capital investments. If a business is to survive and grow the firm must take strategies to effectively structure its capital to determine optimal capital mix because it will be difficult to compete in the industry and gain market strength without a good structure of capital. One of the important decisions taken by management of a firm in finances is capital mix. Sources of capital are internal and external; the internal sources consist of retained profits and or reserves which are sourced by owners while external sources contains short term which are loans and long term external source is debt. An important Germane to existence, growth and sustainability of a firm is its capital structure. In capital structure mix firms should ensure that proportion of debt to be higher than that of equity (Hung and Duc, 2020).The forms of mix of the debt-equity can be in various forms; unlevered firm (100% equity and 0% debt), levered firm (0% equity and 100% debt) and a percentage of debt which can be referred to as capital mix. The majority of the capital structure of a firm can be the component of debt, or the equity to be the majority or an even mix of equity financing and debt financing. Each of the two finances has its own merits and demerits. The fundamental approach of capital structure is of net operating income approach, value of high leveraged firm is the same with low leveraged firm. The relationship between capital structure and financial performance continues to be attracted in finance literature. Financial performance explains the ability of management of a company to use assets/capital to generate revenue which will be able to satisfy the running expenses to declare profits which is to be distributed to shareholders. Since the main objective of every firm is earning profits to the providers of capital for which management has invest and sacrifices certain portion of capital of the business provided by shareholders (Swain & Das, 2017). Erasmus (2008) contended that a valuable tool that aids stakeholders to evaluate the financial position of firm is financial performance. Financial performance explains the financial strengths of firm, financial weakness, opportunities as well as financial threats to the firm (Dogarawa & Harun, 2016). The performance of a firm is reflected in how effectively the resources of the company are managed by the firm. Vatavu (2015) contended that liquidity, fixed assets, business risk, annual ratio of inflation and taxation were discovered by scholars to be among the factors that are influential for finance decisions in firm. According to Julius, Barine and Oluwatosin (2015), in order to improve earnings management of company’s make Gusau Journal of Accounting and Finance, Vol. 3, Issue 3, October, 2022 194 use of equity and debt consistently to finance business operations. An important issue in economic entities is financial performance as such firms must pay attention to financial performance to get the best out of it. Financial performance is affected by the factors which may be internal to the firm or external. Hung and Duc (2020) argue that financial performance is widely believed as the mobilising effect of managing and using capital in a firm. They further opined that performance of business enterprise is an indicator of aggregate economic reflection of the extent of usage of process of factors of production. The extent to which financial objectives are achieved is referred to financial performance and it is the means to measure result of policies, strategies and operations of firm in monetary terms (Eshna, 2020). The primary motive of every firm is to make profit and maximize wealth of providers of capital. The inability of management to make profit to firm means the business cannot survive. Profit is a measure of management performance and as such there are many ratios adopted to measure performance; Return on asset (ROA), Return on equity (ROE), Net profit margin (NPM), Return on investment (ROI), Dividend per share (DPS), Earnings per share (EPS) among others. In this study return on asset will be adopted as measure of performance which is the dependent variable because it is believed by several scholars such as Chowdhury (2020) to be the most suitable measure of performance of a firm by management in terms of level of asset employed. The capital mix of firm and the way in which it impacts on the activities of the company has been a subject of debate among literatures of finance for long. Due to the development of capital structure literature many variables that affect financial performance and financing decisions were found. It has been found that several studies have been undertaken in order to assess how financial performance of firm is impacted by capital structure such as the studies of Julius, Barine and Oluwatosin (2015); Hung and Duc (2020); Swain and Das (2017); Osuji and Odita (2012); Muhammad (2019); Sanusi, Stephen and Vivi (2020); Sorana (2015). Some of these studies have been done in different sectors leaving many areas untouched one of this area is the agricultural sector which will allow this work to have specific finding in order to proffer a suitable recommendation to the sector alone considering the peculiarity in the international financial reporting standards in agriculture. Again looking at the important role of how adequate capital mix plays to prevent firm’s failures in different occasions especially during the covid 19 pandemic and the aftermath of Covid 19 negative impact on financial performance which many companies have not fully recovered from the consequences. Furthermore, the scope of many among the previous studies in the agricultural sector were from 2019 and below, and to the best of the researcher’s knowledge this study will be among the first studies to use the current scope of 2021. These Gusau Journal of Accounting and Finance, Vol. 3, Issue 3, October, 2022 195 reasons gave the opportunity to fill the time gap in order to update the literature to address how a firm’s financial performance is impacted by capital structure among listed agricultural companies in Nigeria. Therefore, the main objective of this research is to examine the impact of capital structure on financial performance of listed agricultural companies in Nigeria in order to fill the vacuum. 2. Literature Review This section reviewed empirical studies that looked into capital structure (long-term debt, short term debt, total debt ratio, total equity ratio) and how they react to financial performance. 2.1 Review of Related Empirical Literatures Dahiru, Dogarawa and Haruna (2016) made an attempt to examined the effect of capital structure on financial performance of manufacturing firms listed on the NSE for a period of six years spanning from 2009-2014, capital structure was proxy Total debt to total asset, total debt to total equity, short term debt to total asset and long term debt to total asset while financial performance was proxy by return on asset. The panel data was analysed using the generalised least square regression. Results revealed that three variables (total debt, short term debt and long term debt) have positive significant impact while only debt to equity was not significant with return on asset. The study recommends that management should increase the components of short term debt of capital structure. Goyal (2013) investigated the influence of capital structure on performance of public sector banks in India for five years spanning from 2008-2012. Long term debt, short term debt and total debt were proxy for independent variable whereas the dependent variable was proxy by return on asset, return on equity and earnings per share. Results showed that a positive relationship between short term debt and all financial performance measures while long term debt showed negative relationship with performance measures. Lin, Khai, Anh, Linh, Ha and Nga (2022) made an attempt to examined the impact of capital structure of performance of firm in listed processing and manufacturing industries in Vietnam for a period of 6 years spanning from 2015-2020. Tobin’s Q and return on asset were proxy for the dependent variable whereas the independent variable was proxy by short term debt and long term debt. The FGLS model was used to analyse the secondary data. The results revealed that short term debt and long term debt have negative effect on return on asset while with regards to Tobin’s Q short term debt had no significant effect on performance while long term debt had a negative effect with performance. Swain and Das (2017) examined the impact of capital structure on financial performance and its determinants for a ten-year period, capital structure was proxy by current ration, long term debt to asset, total debt to asset and debt equity ratio Gusau Journal of Accounting and Finance, Vol. 3, Issue 3, October, 2022 196 while the financial performance was proxy by return on asset, return on equity, return on capital employed and earnings per share. Top 50 manufacturing listed firms were selected to represent the population, the multiple regression technique was employed for the analysis and results revealed capital structure has a significant impact on financial performance. Olayemi and Fakayode (2021) examined the effect of capital structure on financial performance of quoted manufacturing companies in Nigeria for a period of seven years spanning from 2013-2019, capital structure was proxy by short term debt to total asset, long term debt to total asset, total debt to total equity and total debt to total asset ratio while financial performance was proxy by return on equity and return on asset. Panel regression analysis was employed and results revealed total debt to total equity has no significant impact on return on asset, total debt to total asset ratio has negative significant impact on return on asset and return on equity. Osuji and Odita (2012) examined the impact of capital structure on financial performance of Nigerian firms for 6 six years from 2004-2010, 30 listed non-financial companies were selected for the study, the dependent variable was proxy by return on asset and return on equity while independent variable was proxy by debt ratio, asset turnover and asset tangibility. Ordinary least square regression was employed for the data and results revealed that debt ratio had significant negative impact on return on asset and return on equity. Dinh and Pham (2020) attempted to investigate the impact of capital structure on financial performance of Vietnamese listing pharmaceutical enterprises from 2015- 2019 (5 years), all the 30 listed companies were selected for the study, dependent variable was proxy by return on equity while independent variable (capital structure) was proxy by long-term asset ratio, financial leverage ratio and debt to asset ratio. The ordinary least square was adopted for the analysis and results revealed all the independent variables have positive impact on return on equity. Muhammad (2019) examined the impact of capital structure on financial performance of consumer goods industry in Nigeria for 5 years (2012-2016), only 6 six companies were selected to represent the population of the study, return on asset was financial performance proxy while short term debt, long term debt and shareholders’ fund were independent variables proxy. Multiple regression analysis was employed and results revealed that only shareholders’ fund has significant positive impact on financial performance. Lewis (2016) examined the effects of capital structure on the financial performance of firms listed at Nairobi securities exchange for 5 years (2011-2015), 47 companies listed non-financial firms were selected for the study, return was proxy for dependent variable while debt ratio, quick ratio and fixed assets to total asset were proxy for capital structure. Multiple regression technique was employed for the analysis and results revealed negative Gusau Journal of Accounting and Finance, Vol. 3, Issue 3, October, 2022 197 significant relationship between capital structure proxy and financial performance proxy. Sanusi, Stephen and Vivi (2020) examined the impact of capital structure on financial performance of deposit money banks in Nigeria for a period of 10 years (2009-2018), only 5 banks were selected for the study from the population, long term loan to asset, short term loan to asset and total debt to asset were proxy for capital structure while return on asset was proxy for financial performance, the multiple regression was employed for analysing the extracted data. Findings revealed short term debt to asset and total debt to asset to have significant positive impact on return on asset. Sorana (2015) examined capital structure impact on financial performance in Romanian listed companies for a period of 8 years (2003- 2010), cross-sectional regression analysis was carried on the data, total debt, long term debt, total equity and short term debt were indicators of capital structure whereas return on equity and return on asset indicated financial performance. Findings revealed that total equity have significant positive impact on financial performance. 3. Methodology The study used correlational and ex-post facto research designs. The population is made up of entirely five listed manufacturing companies in Nigeria whose shares are traded in the Nigerian Stock Exchange (NSE). The census sampling techniques were used to arrive at sampled. Data were extracted from the annual reports and accounts of listed manufacturing companies in Nigeria for the period of two (2) years 2017 to 2018. Statistical tools such as descriptive, correlation and regressions were employed to analyse the results of the study. 3.1 Variable and their Measurements Variables Proxies Variables Measurement Source Dependent Financial Performance Proportion of Profit After tax to total assets.. Abubakar, Sulaiman and Haruna (2018). Long-term Debt to Total Asset (LTDA) Long term debt/total Asset. Sanusi, Stephen and Vivi (2020) Short-term Debt to Total Asset (STDA) Short term debt/total asset. Sorana (2015). Gusau Journal of Accounting and Finance, Vol. 3, Issue 3, October, 2022 198 Independent Total debt to Total Asset.( TDTA) Total debt/Total asset Muhammad (2019) Total Debt to Total Equity. Total debt/ Total equity Sorana (2015). Firm Size (FSZ) Natural Logarithm of total assets. Abubakar, Sulaiman and Haruna (2018). Source: Author 2023 Model Specification: The model below is specified for the study ROAit = β0it + β1LTDAit + β2STDAit + β3TDTAit + β4TDTEit + β5SIZEit + ε Where: ROA = Return on Asset LTDA = Long-term Debt to Total Asset STDA = Short-term Debt to Total Asset TDTA = Total debt to Total Asset TDTE = Total Debt to Total Equity SIZE = Size of the firm 4. Result and Discussion This section of the study is concerned with empirical result, data will be described and summarised. Table 2: Descriptive statistics Data was entered into STATA software for the descriptive statistics and it is presented for analysis as follows: Table 2: Descriptive Statistics Variable Mean Std. Dev Min Max Skewness Kurtosis ROA .162388 .191761 -.077723 .607413 1.267298 3.984202 LTDA .201259 .118316 .027958 .399508 .456295 3.087036 STDA .332747 .220003 .019973 .650036 .077840 1.758310 TDTA .462372 .201620 .07568 .700758 -.649877 2.44070 TDTE .371252 .183906 .04564 .650076 -.126280 2.260321 Source: STATA OUTPUT version 13 From the 2 above, the average ROA of the companies of the statistics of the variable is 0.162388, the highest is 0.607413 and the lowest is -0.077723 with a standard deviation of 0.191761, the skewness value 1.267298 and the Skewness is 3.984202. Gusau Journal of Accounting and Finance, Vol. 3, Issue 3, October, 2022 199 The result suggests a moderate dispersion of the data from the mean. LTDA shows an average of 0.201259, with the highest of 0.399508 and the lowest of 0.027958 with a standard deviation of 0.118316, the skewness is 0.456295 and the Skewness is 3.087036. The skewness value suggests a wide dispersion from the mean of the data. Furthermore, table 2 shows STDA of listed manufacturing companies in Nigeria has a maximum value of 0.650036 and a minimum value of 0.019973 with an average value of 0.332747, the peak of the data is indicated by the kurtosis with a value of 1.758310 suggesting that most of the values are higher than the mean, the coefficient of skewness of 0.077840 implies that the data is positively skewed, thus, the data meet the symmetric distribution. TDTA has a mean value of 0.462372 with standard deviation of 0.201620, and a maximum of 0.700758 and minimum of 0.7568 respectively. This suggests that the dispersion of the data from the mean is not wide because the standard deviation ids close to the mean. Moreover, table 2 indicate a maximum TDTE value of 0.650076 with minimum of 0.07568 and mean value of 0.371252 respectively. This suggests moderate dispersion of data from the mean. The Skewness of the data as indicated by the kurtosis value of 2.260321 suggesting that most of the values are higher than the mean, the co-efficient skewness of -1.26280 implying that the data is negatively skewed. Table 3: Correlation Matrix The Pearson correlation coefficient is present in this section of the study variables, the individual relationships between the explanatory variables and the dependent variable, on the other hand, the relationship between the independent variables themselves is described also. Table 3: Correlation Matrix Variable ROA LTDA STDA TDTA TDTE FSZ ROA 1.0000 LTDA -0.2580 1.0000 STDA -0.0548 -0.2627 1.0000 TDTA -0.0078 0.2603 0.4272 1.0000 TDTE 0.3288 0.1613 0.2579 0.279 1.0000 FSZ 0.3473 0.0172 0.2023 0.3391 0.2836 1.0000 Source: STATA OUTPUT, Version 13 Gusau Journal of Accounting and Finance, Vol. 3, Issue 3, October, 2022 200 Table 3 shows that the relationship between ROA and LTDA is negative with about 26%, this implies that the relationship between ROA and LTDA is not a direct relationship. STDA and ROA have a negative relationship with about 5%, this implies that the relationship between is not a direct relationship. TDTA is found to have a negative correlation of about 0.7% with ROA implying a non-directional relationship between the variables. TDTE recorded a positive relationship with ROA at a magnitude of 32%, this implies that the relationship between TDTE and ROA is direct. For the association between the explanatory variables themselves, LTDA and STDA recorded a negative value of about 26% implying non-directional relationship between the independent variables. For the relationship between LTDA and TDTA shows a positive value of about 26% implying a direct relationship between the variables. LTDA show a positive relationship of about 16% with TDTE implying that the relationship is direct. The Table 3 also show that the correlation between STDA and TDTA is positive at about 43% implying that the relationship is direct. STDA is found to have a positive correlation with TDTE at about 26%, this implies a moderate direct relationship. Between TDTA and TDTE there is a positive correlation of about 62%, implying a direct relationship between the subsisting variables. Summary of regression result The regression result of the parsimonious model is presented in this section of the study. The interpretation, analysis and discussion will follow. The formulated hypothesis earlier will be tested, policy implications of findings to management and investors will end the section. Table 4.3: Summary of Regression Result Variable Coefficient T-value P-value LTDA -0.064413 -1.21 0.242 STDA 0.120043 2.99 0.009 TDTA 0.270664 3.69 0.002 TDTE 0.303615 7.97 0.000 Adjusted R-sq. 0.7662 Mean VIF 2.67 F-Statistics F-Significant 32.72 0.0000 Source: STATA OUTPUT, Version 13. Gusau Journal of Accounting and Finance, Vol. 3, Issue 3, October, 2022 201 From the Table 5, the co-efficient value for LTDA is -0.064413 with an insignificant p-value of 0.242. This signifies that LTDA has an insignificant negative effect on ROA of listed manufacturing firms in Nigeria. This implies that for every increase in LTDA, the ROA of listed manufacturing firms in Nigeria will decrease insignificantly by the co-efficient value. The result is in-line with Goyal (2013); Lin et al. (2022); Muhammad (2019) and contrary to Dahiru et al. (2016); Sanusi et al. (2020). The result does not support the revised M&M theory which is of the opinion that capital structure affects the performance of the firm however the result is in line with the traditional M&M theory which is of the opinion that the performance of the firm has no relation with capital structure. The regression result for STDA has a co-efficient value of 0.120043 with a t-value of 2.99 from the table 5, which is significant at 0.009 level of confidence. This signifies that STDA of listed manufacturing firms in Nigeria is positively and significantly affecting ROA of listed manufacturing firms in Nigeria. This implies that for every increase in STDA, ROA of listed manufacturing firms in Nigeria will increase by the co-efficient value. This result is in line with Dahiru et al. (2016); Goyal (2013); Sanusi et al. (2020) and contrary with Lin et al. (2022); Muhammad (2019). The result is in support of the revised M&M theory that posits capital structure of the firm affects the financial performance of the firm. The Table 5 recorded a co-efficient value of 0.270664 and a t-value of 3.69 which is significant at 0.002 for TDTA of listed manufacturing firms in Nigeria. This shows that TDTA is positive and significantly influencing ROA of listed manufacturing firms in Nigeria, this implies that for every increase in TDTA, ROA of listed manufacturing firms will increase by the co-efficient value. This result is in line with Dahiru et al. (2016); Swain and Das (2017); Dinh and Pham (2020) and contrary with Olayemi and Fakayode (2021). As shown in Table 5 TDTE has a co-efficient value of 0.303615 and a t-value of 7.97 with a significant p-value of 0.000. This signifies that TDTE has a positive and significant impact on ROA of listed manufacturing firms in Nigeria. This implies that for every increase in TDTE, ROA of listed manufacturing firms in Nigeria will increase by the co-efficient value. The result is in line with Swain and Das (2017) and contrary to Dahiru et al. (2016); Olayemi and Fakayode (2021). The result also supports pecking order theory and validates the revised M&M theory arguing that the more the firm raises capital through debt the high possibility of profit to increase and that financial performance of the firm is affected by the decision taken by management on capital structure because of the effect of tax on profits. Gusau Journal of Accounting and Finance, Vol. 3, Issue 3, October, 2022 202 For the overall model of the study, R2 showed 0.7662 values implying that ROA of listed manufacturing firms in Nigeria is explained by LTDA, STDA, TDTA and TDTE to tune of about 77%. The F-statistics value of 32.72 with significant level of 99% indicates that the model is fit and the variables selected were properly selected. 5. Conclusion and Recommendation The main aim of conducting this study is to investigate the relation of capital structure on financial performance of listed manufacturing firms in Nigeria; this is because of the mix in findings of several scholars in the area of capital structure of the firm. Hypotheses have been formulated to be tested in order to achieve the stated objectives, the study focused on capital structure and financial performance of the firm for a period of 5years and finally the study is set to be important to a diverse group of individuals ranging from management, investors, academicians and students. Various literatures have been reviewed for empirical evidence. The post- positivism is the paradigm of this study, all the 5 listed manufacturing firms consisted of the population of the study and census sampling technique was adopted, the multiple regression technique is adopted for the regression of the secondary data. In conclusion, the regression result of this study concludes that; LTDA has no significant influence on financial performance of listed manufacturing firms in Nigeria. STDA has a significantly positive influence on the financial performance of listed manufacturing firms in Nigeria. TDTA has a significantly positive influence on financial performance of listed manufacturing firms in Nigeria. Finally, TDTE also has a positive and significant influence on the financial performance of listed manufacturing firms in Nigeria. Therefore, it is recommended that Management of listed manufacturing firms in Nigeria should try to reduce the amount of long-term debt because to the firm because the more capital is raised through long term debt, the more the equity shareholders will also demand increase in their returns and this will have a negative impact on profits. Management should pay attention on short debts because of its ability to settle them when due and also because of the positive influence they have on profits of the firm. Shareholders are advice to encourage management to increase the amount of short term debts. Gusau Journal of Accounting and Finance, Vol. 3, Issue 3, October, 2022 203 The management is advice to implore more efforts as to the ability of assets employed to increase profits. Shareholders should encourage the amount of debt taken by management of listed manufacturing firms up to the optimal level of both long term debt and short term debt because of the positive influence on financial performance. Reference Abubakar, A. Mazadu, S. A. & Yusuf, A. M. (2020). Audit Quality and Earnings Management of listed Insurance Companies in Nigeria. Gusau Journal of Accounting and Finance, 1(1), 1-14. Abubakar, A. Sulaiman, I. & Haruna, U. 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