KIJHUS Volume. 2, Issue 1 (2021)

The main objective of this study was to examine the effect of capital structure on firm’s performance in Nigeria, using correlation and regression analysis. The study revealed that capital structure exert positive effect on profitability in Nigerian manufacturing firms, this implies that for a percentage increase in capital structure lead to 0.9 percent increased profitability. The study also revealed that capital structure exerts negatives effect on liquidity in Nigerian manufacturing firms; this implies that for a percentage decrease in capital structure lead to 20 percent decreased liquidity. The study concludes that capital structure has positive effect on firms’ performance in selected Nigerian manufacturing firms during the reviewed period. The study also revealed that capital structure exerts negatives effect on liquidity in Nigerian manufacturing firms; this implies that for a percentage decrease in capital structure lead to 20 percent decreased liquidity. The study concludes that Nigeria Manufacturing companies should relying less on liquidity and more on equity as a source of finance to boost their firm performance. The result the study recommended that Manufacturing firms should chose the most optimal capital structure, as it is the profitability that best maximizes firms value, also Manufacturing firms should encourage the use of long term debt in there capital structure since it has positive impact.