EQUITY CAPITAL AND FINANCIAL PERFORMANCE OF QUOTED CONSUMERS GOODS MANUFACTURING COMPANIES IN NIGERIA

Abstract

Financial performance is the measure of how well a firm can use its assets from its primary business to generate revenues. Erasmus(2008) noted that financial performance measures like profitability and liquidity among others provide a valuable tool to stakeholders which aids in evaluating the past financial performance and current position of a firm. Financial performance valuation are designed to provide answers to a broad range of important questions, some of which include whether the company has enough cash to meet all its obligations, is it generating sufficient volume of sales to justify recent investment. Capital structure is closely linked with financial performance (Tian and Zeitun, 2007). Financial performance can be measured by variables which involve productivity, profitability, growth or, even, customers‟ satisfaction. These measures are related among each other. Financial measurement is one of the tools which indicate the financial strengths, weaknesses, opportunities and threats. Those measurements are return on investment (ROI), i.e return on assets (ROA) and return on equity (ROE) residual income (RI), earning per share (EPS), dividend yield, growth in sales, e.t.c (Stanford, 2009)