Corporate organizations often grapple with finding the optimal balance between equity and debt to maximize returns and enhance firm value. This study examines the impact of capital structure on financial performance of consumer goods companies in Nigeria. Drawing on secondary data from the annual financial statements of 21 firms listed on the Nigerian Exchange Group between 2014 to 2023, the research adopted a census sampling method and an ex-post facto design to analyze the relationship between capital structure variables and financial performance. To test the study’s hypotheses, descriptive statistics, correlation analysis, and multiple regression techniques were employed. The findings revealed a significant overall relationship between capital structure and financial performance. However, the specific metrics examined total debt to equity ratio, short term debt to total assets ratio, and long-term debt to total assets ratio did not show a statistically significant effect on the financial performance of the sampled firms. The study underscores the need for firms to exercise careful judgment in managing their mix of equity and debt, given the broader implications for corporate performance. It also recommends that regulatory bodies support capital-constrained firms by improving access to long-term debt financing. Such support could strengthen firms’ operational efficiency and financial outcomes in the short term, reducing reliance on short-term borrowing as a temporary solution to funding and profitability challenges.