EQUITY STRUCTURE AND FINANCIAL PERFORMANCES OF LISTED FOOD AND BEVERAGES FIRMS IN NIGERIA

Abstract

Maximizing the wealth of shareholders through its financial prosperity is one of the most important objectives that finance managers globally seek to fulfill. At the frontline of ensuring this performance is the decision of how a firm finances its core operations through its capital structure which entails debt and equity. Equity financing decision entails two major components of finance ordinary share capital, share premium and retained earnings. The objective of this study was to evaluate the effect of equity structure on financial performances of listed food and beverages firms in Nigeria. The study used an ex post facto research design. The population of the study was eight (8) food and beverage firms in the Nigerian Exchange Group (NGX) and the time frame considered for this study was 2014-2023. The sample size was six (6) listed food and beverages firms using census sampling technique. The data used in this study was sourced from annual reports and statement of accounts of the selected companies. This study employed descriptive, unit test, and panel least square multiple regression analysis. The study findings indicated that, there is a negative and significant effect of ordinary share capital on earnings per share, there is a positive and insignificant effect of share premium on earnings per share, and finally, there is a negative and significant effect of retained earnings on earnings per share of listed food and beverages firms in Nigeria. Based on findings, the study concluded that there is a positive and significant effect of equity structure on financial performance of listed food and beverages firms in Nigeria under the period of study between 2014 and 2023. It was suggestion amongst others that listed food and beverages firms should maximise the ordinary share capital options available to them in order to increase the financial performance.