Effect Of Financial Structure On Financial Performance Of Selected Listed Consumer Goods Manufacturers In Ghana

Abstract

Financial structure plays a key role in organisational performance, of which listed consumer goods manufacturers in Ghana are not exempted. This means that financial structure needs to be given keen attention in every business. The purpose of the study was to examine the effect of financial structure on financial performance among listed consumer goods manufacturers in Ghana. The study employed descriptive survey research design and data were solicited from manufacturing listed companies on the Ghana Stock Exchange. Population used for the study comprises of all the nine (9) listed manufacturing companies on the Ghana Stock Exchange. This cover publishes the financial accounts of the companies from 2013 to 2021. Purposive sampling was employed to select the sample size. Quantitative statistics that were "extracted onto the observation sheet from the published audited financial statements" are considered raw data. Data were analysed using software such as STATA 14. The study revealed that leverage has negative impact on return on asset while equity has no relationship with return on assets. Meanwhile evidence revealed that there negative correlation between firm size and return on assets. Liquidity was found to have negative significant relationship with leverage. It was found that earnings per share have significant negative relationship with leverage. There was strong negative correlation between leverage and profit margin. The study made the following policy recommendations. The study recommends the need for the listed manufacturing companies to look at their leverage strategies and policy further in order to improve the impact of leverage on their return on assets. Suggestion was made that manufacturing companies listed on Ghana Stock Exchange to reconsider their equity policy so as to have positive effect on return on assets and the companies should continue to meet the effective evaluation of leverage strategies and its effective implementation in order to improve their earnings per share.