Impact of Capital Structure on Financial Performance of Firms in the Nigerian Healthcare Sector

Abstract

This study aims to explore how the capital structure affects the financial performance of healthcare companies listed on the Nigerian StockExchange(NSE)from2012to2021.Capitalstructurewhichconsidershowacompanycombinesitsmixofequityanddebtinfinancingits business is important to its overall operations and growth. To conduct this research, eight healthcare firms listed on the NSE were deliberately chosen. The study examined the financial data of various firms, through their annual reports. The data included short-term and long-term debts, equity (the value of a company’sshares), return on equity,andsize.The studyusedcorrelation and regressionfor its analysis. The results showed that short-termdebt,long-termdebt,andequityhadanegativebutsignificantrelationshipwithreturnonequity.However,thesizeofthecompany had a positive and significant relationship with return on equity. Based on the findings, the study recommends that healthcare firms should consider using long-term debts to increase the time to repay the borrowed capital and generate more profit