A suitable capital structure is a key choice for any business establishment. The choice is key not just for the reason of making the most of returns to different organizational areas, but similarly due to the bearing such a choice have on an establishment’s capability to handle its competitive setting. Establishments struggle when structuring their finance since it is difficult to determine how it will affect performance, which is crucial for the establishment's worth and, therefore, its survival. The main aim of this research was to determine capital structure effect on financial performance of NSE listed firms. The independent variable for the research was capital structure measured using the ratio of total debt to total assets while the dependent variable was financial performance measured using ROA. The control variables were firm size and liquidity. The study was guided by relevance and irrelevance theory, agency cost theory and pecking order theory. Descriptive research design was utilized in this research. The 42 non-financial NSE listed firms as at December 2021 served as target population. The study collected secondary data for five years (2017-2021) on an annual basis from CMA and individual NSE listed firms annual reports. Descriptive, correlation as well as regression analysis were undertaken and outcomes offered in tables followed by pertinent interpretation and discussion. The research discovered a 0.6125 R square value implying that 61.25% of changes in NSE listed firms financial performance can be described by the three variables chosen for this research. The multivariate regression analysis further revealed that individually, capital structure has a negative effect on performance of NSE listed firms (β=-0.442, p=0.001). The control variable which was firm size displayed a positive and significant performance influence as shown by (β=0.624, p=0.000). Firm liquidity also exhibited a positive and significant effect on performance of NSE listed firms (β=0.184, p=0.029). the study recommends the need for practitioners among NSE listed firms to strike a balance between the benefits and costs associated with debt as high levels of debt negatively affects financial performance. The study also recommends that NSE listed firms should work at improving their asset base and their liquidity as they significantly affect their performance.

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