THIN CAPITALIZATION AND FINANCIAL PERFORMANCE OF LISTED HEALTH COMPANIES IN NIGERIA

Authors

The study examined thin capitalization and financial performance of listed health companies in

Nigeria. The objectives of the study among others where; ascertain the relationship between thin

capitalization and profit after tax of listed pharmaceutical companies in Nigeria. Determine the

relationship between thin capitalization and earnings per share of listed pharmaceutical companies

in Nigeria. Determine the moderating effect of firm size on the relationship between capitalization

and financial performance of listed pharmaceutical companies in Nigeria. The study employed an

ex-post-facto and correlational research design. The population and sample size of this study

consisted of 7 listed Pharmaceutical (Healthcare) companies on the Nigeria Exchange Group from

(2006 – 2020). The instrumentation was secondary data, The formulated research questions were

analyzed with descriptive statistics. The hypotheses were tested using the Ordinary Least Square

(OLS) Model regression analysis with the aid of E-view (10). Findings of the study were that that

there is no significant relationship between thin capitalization and profit after tax of listed

pharmaceutical companies in Nigeria. There is no significant relationship between thin capitalization

and earnings per share of listed pharmaceutical companies in Nigeria. Also, firm size does not

significantly influence the relationship between Tax Planning Strategies and the Financial

Performance of listed Pharmaceutical Companies in Nigeria. Hence the study recommends among

other that, firms should ensure that proper analysis of strategies, cost, and benefits therefrom is

done before embarking on it. Also, to reduce abuse of privileges, shelters and loopholes in the tax law