Capital structure and financial performance of manufacturing firms in Uganda:

Abstract

This study intended to find out the effect of Capital Structure and Financial Performance in manufacturing firms in Uganda, particularly Nile Breweries Limited in Jinja District. Capital Structure was viewed in three dimensional constructs consisting of debt capital, equity capital, and retained earnings as shown. Financial performance on the other hand was viewed in terms of return on equity and return on assets. The study used cross sectional research design and quantitative approach. Data was collected from 60 as a target population comprising of senior management, marketing officers and clients. Data was collected using a closed end questionnaire and statistical package of social science SPSS V.22 was used for analyzing data from which frequency tables, descriptive statistics, reliability, validity, correlation and regression results were obtained. The findings of the study revealed that there is a positive and significant effect between debt capital; equity capital and retained earnings on Financial Performance. Therefore the study, recommends that in order for the manufacturing enterprises to improve on Financial Performance, they need to employ equity capital first, retained earnings, next and debt financing as the last option.