PREFERENCE SHARE CAPITAL AND FINANCIAL PERFORMANCE OF LISTED CONSUMERS GOODS MANUFACTURING COMPANIES IN NIGERIA

Abstract

The study examined the relationship between preference share and financial performance of listed consumer goods manufacturing companies in Nigeria. Descriptive research design was employed, and the population of the study was 27 consumer goods manufacturing companies listed on the Nigeria Exchange Group (NXG) and obtained from the Fact book on a time series of 2011-2020, while a sample size of 25 consumer goods manufacturing companies listed on the Nigerian Stock Exchange Group (NXG) was used. Historical data was obtained from the annual reports of the companies and the tools of analyses were Correlation and Regression analysis with the aid of E-views version 10.0 econometric package. The findings revealed that there is a strong significant relationship between preference share capital and financial performance metrics (return on assets and return on equity). The study therefore concluded that optimum capital structure boost financial performance of listed consumer goods manufacturing companies in Nigeria; companies should capitalize on good capital structure mix. This is in line with the findings of this study that the short-term debt of listed manufacturing firms in Nigeria influences their financial performance positively. The study recommended that the management of Nigerian listed Consumer Goods Manufacturing Companies should work very hard to optimize the capital structure of their listed manufacturing firms to increase the financial performance. They can do that through ensuring that their capital structure is optimal; the Management of Nigerian listed Consumer Goods Manufacturing Companies should increase their commitments into short term debt to total asset to improve financial performance from their business operation.