MODERATING EFFECT OF EXTERNAL FACTORS ON THE RELATIONSHIP BETWEEN CAPITAL STRUCTURE AND FINANCIAL PERFORMANCE OF LISTED AGRICULTURAL COMPANIE IN NIGERIA

Abstract

This study examined the moderating effect of external factors on the relationship between capital structure and financial performance of listed agricultural companies in Nigeria. The study adopted ex-post factor research design with moderated regression model, used to analyze the data of dependent and independent variables used. The population comprised of all the agricultural companies listed on the Nigerian Exchange Group. There are five (5) agricultural companies quoted on the Nigerian Exchange Group as at December 31, 2024. Due to small nature of the population, all the five companies were used. Secondary data was extracted from the audited financial reports and accounts of the listed agricultural companies for the period of 2018 to 2022. With the aid of SPSS version 23 as technique for data analysis, the study concluded that external factors influence the relationship between capital structure and financial performance of agricultural companies in Nigeria. Therefore the study recommended amongst others that, agricultural businesses should use moderate debt levels in their capital structure to avoid paying a high cost of capital. High levels of interest payments reduce the availability of internal funds for investment.