EFFECT OF CAPITAL STRUCTURE ON THE PERFORMANCE OF SELECTED SMALL SCALE BUSINESS IN MAIDUGURI METROPOLIS, BORNO, NIGERIA

Authors

  • BAWU ABBA SULEMAN Department of Business Administration, Federal Polytechnic, Monguno, Borno State, Nigeria. Author
  • MUSA USMAN Department of Business Administration, Federal Polytechnic, Monguno, Borno State, Nigeria. Author

Keywords:

Capital Structure, Performance, Small Scale Business, Equity Capital, Debt Capital

Abstract

The study examine the effect of capital structure on the performance of selected small scale business in Maiduguri metropolis, Borno State, Nigeria. The study assess the effect of equity capital on profitability and effect of debt capital on sales growth. The population of the study was two hundred and thirty nine (239) employees of five (5) selected small scale business in Maiduguri metropolis, borno state, Nigeria. The sample size of the study was one hundred and fifty (150) respondents from the study population using Yamane formula. Data was collected by used structured questionnaire which were administered to the respondents. The study used multiple regression to analysed the data with the aid of statistical package for social sciences (SPSS). The finding revealed that equity capital has no significant effect on profitability. This implies that most of the SSBs surveyed had a capital structure financed by more equity than debt capital. The finding also revealed that debt capital has no significant effect on sales growth. This implies that capital structure contributes to SSBs growth which subsequently result in increasing sales growth. The study concludes that utilization of different levels of equity and debt sources enables SSBs to invest more and have more profit. The high degree of equity financing implies relative high level of profitability. SSBs with good asset base attracts lending financial institutions hence boost their performance as they are able to face challenges that are in business. The study recommends that SSBs should develop an investment policy that enable them to maintain option structure and seek financial advisory services to carry out a continues survey of their firm liquidity position and audit their book of account and make good investment decision in order to increase profit.

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Published

30-04-2024

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How to Cite

EFFECT OF CAPITAL STRUCTURE ON THE PERFORMANCE OF SELECTED SMALL SCALE BUSINESS IN MAIDUGURI METROPOLIS, BORNO, NIGERIA. (2024). Journal of African Advancement and Sustainability Studies, 4(2). https://ssaapublications.com/sjaass/article/view/204

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