Title: Capital structure and return on capital employed of construction companies in Nigeria

Authors: Sirajo Murtala; Mohammed Ibrahim; Sagir Lawal; Buhari Baba Abdullahi

Addresses: Department of Accounting, Faculty of Arts and Social Sciences, Gombe State University, Gombe, Nigeria ' Department of Accounting, Faculty of Arts and Social Sciences, Gombe State University, Gombe, Nigeria ' Department of Accounting, Nigeria Police Academy, Wudil, Kano State, Nigeria ' Department of Accounting, Faculty of Arts and Social Sciences, Gombe State University, Gombe, Nigeria

Abstract: This study examined the impact of capital structure on return on capital employed of construction firms in Nigeria. The data for the study was obtained from the annual report and accounts of the sampled firms. The study employed panel data analysis and pooled regression, fixed-effect and random-effect estimation techniques for the analysis and Stata 12.0 was used. The study concluded that capital structure has a negative impact on return on capital employed of the sampled construction companies in Nigeria. The study recommends that the managers of the construction companies should be careful while using debt as a source of finance; they should try to finance their activities with retained earnings and use debt as a last option.

Keywords: capital structure; performance; return on capital employed; African; accounting; auditing and finance; construction companies; Nigeria.

DOI: 10.1504/AJAAF.2018.091125

African Journal of Accounting, Auditing and Finance, 2018 Vol.6 No.1, pp.1 - 20

Received: 01 Dec 2016
Accepted: 15 Jun 2017
Published online: 11 Apr 2018 *

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