Capital Structure and Financial Performance of Down Stream Oil and Gas Companies in Nigeria

This study considered at how capital structure affects the financial performance of downstream oil and gas companies in Nigeria. It focused on eight listed firms in this sector and covered the period from 2015 to 2024. The research used an ex-post facto design, relying on secondary data from the annual reports and financial statements of the selected companies. Capital structure was measured using the Short-Term Debt Ratio (STDR) and Long-Term Debt Ratio (LTDR). Financial performance was represented by Return on Assets (ROA). The study tested hypotheses to see how capital structure impacts financial performance. The findings showed that both the short-term debt ratio and long-term debt ratio positively and significantly affect return on assets. This indicates that companies with a good balance of debt financing typically enjoy better profitability and stronger financial performance. Based on these results, the study concludes that capital structure is important for improving the financial performance of downstream oil and gas companies in Nigeria. It suggests that firms should maintain a healthy balance between short-term and long-term debt to maximize returns and reduce financial risk. This study adds to the existing literature by offering evidence on the link between capital structure and financial performance in Nigeria's downstream oil and gas sector. It also provides valuable insights for managers, investors, and policymakers who want to boost profitability and sustainability.

Capital Structure; Short Term Debt; Long term Debt; Financial performance; Downstream oil & gas

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