Evaluating the Role of Transparent Financial Reporting on Capital Structure Decision-Making of Nigerian Beverage Companies
Purpose – Inaccurate financial report may lead to wrong financing decisions in a business. This study therefore examines how financial reporting transparency supports the capital structure decisions-making process, focusing on Nigerian listed beverage companies. Design/methodology/approach – The...
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| Format: | Article |
| Language: | English |
| Published: |
Maranatha Christian University
2024-11-01
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| Series: | Jurnal Akuntansi |
| Online Access: | https://journal.maranatha.edu/index.php/jam/article/view/10003 |
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| Summary: | Purpose – Inaccurate financial report may lead to wrong financing decisions in a business.
This study therefore examines how financial reporting transparency supports the capital
structure decisions-making process, focusing on Nigerian listed beverage companies.
Design/methodology/approach – The study analyzes secondary data from the annual
financial statements of six selected listed beverage firms for a period of twelve years (2012-
2023). The research employs an ex post facto research approach. The research applies
descriptive statistics and panel regression methods comprising fixed effect, random effect
and pooled least squares models. After conducting model selection tests, the study considers
a random effect model for data estimation.
Findings – The results reveal that capital adequacy, debt financing and tangibility of asset
play positive significant roles on capital structure decisions-making of Nigerian beverages
companies. The research discovers that maintaining transparent financial reports facilitate
capital structure decision-making processes of Nigerian beverage companies. The study
suggests for beverage firms to diversify their financing sources in order to reduce
dependency on debt and avoid its associated risks
Research limitations/implications – The limitations include industry specificity and
regional applicability, but the findings highlight the importance of adequate capital,
tangible assets and debt financing in capital structure decision of beverage companies.
Keywords: Capital Structure, Decision-Making, Nigerian Beverage Companies,
Transparent Financial Reporting |
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| ISSN: | 2085-8698 2598-4977 |