ANALYZING THE CAPITAL STRUCTURE EFFECT IN FINANCIAL STABILITY OF FIRMS IN COSUMER GOODS SECTORS USING ARTIFICIAL INTELLIGENCE

Abstract

Artificial intelligence (AI) is the capacity of a machine to display traits similar to those possessed by humans. This study has examined the capital structure effect on the financial stability of firms classified under consumer goods of the Nigerian exchange group. Secondary data based on extracts from annual report and accounts of selected consumer goods firms listed on the Nigeria exchange group market have been used in this study. Multiple regression method will be employed to analyse the relationships between the dependent and independent variables. The model will be estimated using E-view packages (version 7.0). (i) to figure out how debt-to-equity ratio and return on assets for consumer goods companies relate to one another, and (ii) to figure out how interest coverage affects return on assets for consumer goods companies (iii) the debt-to-equity ratio and the return on assets of companies that produce consumer items do not significantly correlate and (iv) In Nigeria, interest coverage has no appreciable impact on how well businesses function in the consumer products market. Additionally, in agreement with numerous empirical research on capital. This analysis supports the a priori association between leverage and company performance in a sample of Nigerian companies. Leverage is said to have a favourable effect on a company's performance, but the degree to which it does so depends on the return on assets (ROA) and liquidity of the companies. Findings from the analysis will reveal if capital structure has significant impact on financial performance of consumer goods firms in Nigeria. This study will also give recommendations for both government and firms in order to increase firm's performance level.