scholarly journals Capital Structure and Firm’s Profitability: Evidence From Listed Consumer Goods Sector in Nigeria

2020 ◽  
Vol 9 (2) ◽  
pp. 50
Author(s):  
Udobi-Owoloja, P. I. ◽  
Gbajumo-Sheriff, M.A. ◽  
Umoru, B. ◽  
Babatunde, S.A ◽  
Ilimezekhe, D
Keyword(s):  
Capital Structure ◽  
Consumer Goods ◽  
Stock Exchange ◽  
Total Asset ◽  
Short Term ◽  
Interest Payment ◽  
Financial Reports ◽  
Listed Firms ◽  
The Impact

This study investigated the impact of capital structure on profitability of consumer goods firms in Nigerian for a period of eight years (2011-2018). Data of ten (10) randomly selected listed firms of the Nigeria Stock Exchange were derived from the firms’ published financial reports for the period covered. The panel regression results revealed that Debt to Asset Ratio(DAR) is positively significant on Return On Asset(ROA) (Proxy for profitability),while other proxies of capital structure shows that Debt to Equity(DER), Liquidity Ratio(LIQ), are not statistically significant, Short Term Debt to Total Asset Ratio (SDTA) shows a negative connection, Firm Size (FS) has a weak correlation with profit and Long Term Debt to Total Asset Ratio (LDTA) do not influence firms’ profitability of the consumer goods sector of Nigeria economy. In conclusion, capital structure influences the profitability of consumer goods sector of Nigerian Stock Exchange. It was recommended that firms in that sector should leverage on debt financing to boost their earnings as interest payment on debt is tax deductible.

scholarly journals Impact of Capital Structure on Profitability:An empirical analysis of listed firms in India

2018 ◽  
Vol 7 (2) ◽  
pp. 1-6
Author(s):  
Atif Ghayas ◽  
Javaid Akhter
Keyword(s):  
Capital Structure ◽  
Stock Exchange ◽  
Short Term ◽  
Return On Equity ◽  
Listed Firms ◽  
Relationship Capital ◽  
The Impact ◽  
The Relationship ◽  
Positive Effect

This study aims to empirically examine and analyze the impact of capital structure decision on the firm’s profitability by using a sample of 35 Indian pharmaceutical companies listed on Bombay Stock Exchange (BSE) during the period of 5 years from 2012 to 2016. Regression Analysis is used to measure the extent and nature of the relationship. Capital structure variables used in the study are ratio of long-term debt to total assets (LDA), ratio of short-term debt to total assets (SDA) and ratio of Total debt to total assets (DA) while profitability has been measure by Return on Equity (ROE). Firms Size (SIZE)and Salesgrowth(GROW) are also used as control variables. Results reveal a positive effect of SDA and DA on ROE, while a weak-to-no effect was found of LDA on ROE.

scholarly journals Capital Structure and Firms’ Performance: Evidence from Vietnam’s Stock Exchange

2015 ◽  
Vol 7 (12) ◽  
pp. 1 ◽  
Author(s):  
Tristan Nguyen ◽  
Huy-Cuong Nguyen
Keyword(s):  
Capital Structure ◽  
Stock Exchange ◽  
Debt Maturity ◽  
Management Process ◽  
Short Term ◽  
Fixed Assets ◽  
Two Factors ◽  
The Impact ◽  
Very High

<p>Our paper examines what impact capital structure has on firms’ performance in selected firms listed on HCMC Stock Exchange. The data is collected from 147 listed companies during the period from 2006 to 2014. The study not only checks the impact the level of leverage has on firms’ performance, which is found to be negative in this study, but it also uses the short-term and long-term debt ratios to see the effect of debt maturity. However, there is no difference whether it is short-term or long-term. Tangibility is found to be negative with a very high proportion on average. With the suggestion that companies might invest too much in fixed assets and there is a lack of efficiency, this could be the alert for firms to improve their management process. Size and growth are found to be positive, since larger firms have lower costs of bankruptcy and higher growth rates associate with higher performance. Moreover, the study also adds the effects of industry and macroeconomics, and the result shows a correlation between the two factors and firms’ performance.</p>

scholarly journals Capital Structure and Investment Growth Opportunity of Listed Pharmaceutical Firms in Nigeria

2017 ◽  
Vol 2 (1) ◽  
pp. 50
Author(s):  
Shehu Usman Hassan ◽  
Joseph Aitimon
Keyword(s):  
Capital Structure ◽  
Stock Exchange ◽  
Investment Opportunity ◽  
Short Term ◽  
Pharmaceutical Firms ◽  
Ex Post ◽  
Growth Opportunity ◽  
Investment Growth ◽  
The Impact

This study assesses the impact of capital structure on investment opportunity growth, using listed pharmaceutical firms in Nigeria. The main objective of the study is to ascertain the level to which capital structures influences the investment opportunity growth of listed pharmaceutical firms in Nigeria. The methodology employed is the use of secondary data and the ex-post facto research design. The population of the study is all 7 pharmaceutical firms listed on the Nigerian Stock Exchange as at 31st December, 2013. The study used regression as a tool of analysis. Findings show that Short term debt, total debt and performance were found to have significant, negative and strong effect on investment growth opportunity of Listed Pharmaceutical firms in Nigeria, while long term debt have no effect on investment growth opportunity of Listed Pharmaceutical firms in Nigeria, within the sturdy period. The study recommends that pharmaceutical firms should maintain a minimal level of short term debt because tying down too much of it current assets will reduce investment opportunity, also the management of listed Pharmaceutical firm should increase the level at which the organization uses long term debt to finance its business activities, as this may go a long way in increasing the investment opportunity potentials of the organizations, we also recommend that mmanagement should reduce the combination of its short term debt and long term debt and channel such to a highly profitable investment so that so that it will encourage them to invest more in other business opportunity that will bring more fortune to the business and shareholders at largemore room.

An Empirical Study on Capital Structure and Corporate Performance of Chinese Listed Companies

2016 ◽  
Vol 5 (3) ◽  
Author(s):  
Fahd Al-Duais
Keyword(s):  
Capital Structure ◽  
Corporate Performance ◽  
Positive Impact ◽  
Stock Exchange ◽  
Listed Companies ◽  
Short Term ◽  
Chinese Listed Companies ◽  
The Impact ◽  
The Relationship

The relationship between level of debt and the companys performance remains an important unsolved issue in the field of financing. It is very important to know how Chinas listed companies manage their capital towards business growth. This paper investigates the impact of the capital structure on corporate performance of a sample of 711 listed companies on the Shenzhen Stock Exchange in China in 2014. The results indicates that there is a positive relation between financial leverage and corporate performance as well as there is a positive impact that the mixture of long-term debt and short-term debt (using total debt). This would help decision maker in the companies to finance firms operation in the both periods. On the other hand, the short term debt has a negative relation and impact on corporate performance compared to the changing in firm size which cannot change in the profitability of firms.

scholarly journals Struktur Modal dan Kinerja Perusahaan (Studi pada perusahaan yang terdaftar di Bursa Efek Indonesia periode 2011 s/d 2012)

2014 ◽  
Vol 5 (1) ◽  
Author(s):  
Novi S Budiarso
Keyword(s):  
Firm Performance ◽  
Capital Structure ◽  
Firm Value ◽  
Stock Exchange ◽  
Optimal Level ◽  
Stock Exchanges ◽  
Listed Firms ◽  
Total Debt ◽  
The Impact

Abstract This paper examine the impact of capital structure on firm performance, in Indonesian Stock Exchange. Firm performance are analyzed from the side of accounting indicators, in this research use liquidity. Because the optimal level of debt of the firm is limited by the liquidity of the assets and it depends on the average usage of the debt in the particular industry. In the other side liquidity  is  conventionally  seen  as  reflecting  investors’  degree  of  risk -aversion, The study collects  of listed firms in Indonesian Stock Exchanges during 2011 to 2012. The listed firms on sub sector trade, services and investment. Multiple Regression analysis approach was employed in carrying out this analysis. Specifically, determined the simultaneous relationships among the various variables. The results show that as partial total debt to asset significantly influences to company’s performance but long term debt to asset not significantly influences to company’s performance. Simultaneously, total debt to asset and  long term debt to asset influences company’s performance. This evidence is consistent with models of optimal capital structure and with the hypothesis that debt level changes release information about changes in firm value/performance.

scholarly journals Determinants of Capital Structure within the Context of Corporate Governance in Egypt

2018 ◽  
Vol 13 (8) ◽  
pp. 26 ◽  
Author(s):  
Hanaa A. El-Habashy
Keyword(s):  
Corporate Governance ◽  
Capital Structure ◽  
Emerging Economy ◽  
Managerial Ownership ◽  
Listed Firms ◽  
Western Countries ◽  
Specific Factors ◽  
The Impact ◽  
The Capital Structure

This study aims to investigate the characteristics of corporate governance that impact the capital structure decisions in listed firms in Egypt, to test the efficiency of the research results conducted in the developed Western countries in an emerging economy. A sample of 240 observations from the most active non-financial companies collected in the period 2009-2014 was used for hypothesis testing. Multiple regression models (OLS) were used for data analysis. Seven variables are used in measuring the attributes of corporate governance; they are the managerial ownership, institutional shareholding, shares owned by a large block, board size, board composition, separation of CEO/Chair positions and audit type. Four ratios were calculated for measuring the capital structure, they are long-term and short-term debt to assets, total debt to assets and debt to equity. The results suggest that corporate governance attributes have a significant impact on the capital structure decisions of listed Egyptian companies. In addition, firm-specific factors such as profitability, tangibility, growth opportunities, corporate tax, firm size and non-debt tax shields influence the choice of capital structure in Egypt. The results showed the same relationship with what was obtained in developed Western countries. The paper offers some contribution in the literature and helps to understand the impact of corporate governance on Egypt's capital structure as an emerging economy.

scholarly journals The impact of firms’ and CEOs’ social media usage on corporate performance

2021 ◽  
Vol 18 (4) ◽  
pp. 21-35
Author(s):  
Wafa Ghardallou
Keyword(s):  
Social Media ◽  
Corporate Performance ◽  
Stock Exchange ◽  
Estimation Method ◽  
Annual Reports ◽  
Short Term ◽  
Listed Firms ◽  
Media Usage ◽  
Funding Program ◽  
The Impact

The impact of social media usage on corporate performance has not been examined in the Saudi context. This paper aims to investigate the influence of social media, namely companies’ and CEOs’ involvement in Twitter and LinkedIn, on the profitability of Saudi Arabia listed firms. A dynamic panel estimation method is used to empirically assess this relationship. The study employs 120 firms listed on the Saudi Stock Exchange Tadawul from 2014 to 2017. Data are obtained from the companies’ annual reports. Statements of financial status as well as income statements are used to collect data on the dependent variable and control variables. The results show that having a LinkedIn official account by both the CEO and the company does not improve the enterprise performance. In contrast, companies that are active on Twitter will contribute to an increase in their short-term performance. CEOs who engage in Twitter via a high number of followers help to boost the performance of their companies in the long and short term. Hence, this paper recommends that Saudi firms should be aware that their performance could be increased by monitoring their presence on social networks and by having a strong intention to use these tools. AcknowledgmentsThis study was funded by the Deanship of Scientific Research at Princess Nourah bint Abdulrahman University through the Fast-track Research Funding Program.

scholarly journals Capital Structure and Firm Performance: Evidence from Malaysian Public Listed Plantation Companies

2021 ◽  
Vol 5 (1) ◽  
pp. 123-142
Author(s):  
Kim Foong Jee ◽  
Jia En Joanne Ngui ◽  
Pei Pei Jessica Poh ◽  
Wai Loon Chan ◽  
Yet Siang Wong
Keyword(s):  
Firm Performance ◽  
Capital Structure ◽  
Significant Relationship ◽  
Firm Growth ◽  
Control Variable ◽  
Short Term ◽  
Total Debt ◽  
And Performance ◽  
The Impact

This paper examines the relationship between capital structure and performance of firms. The study is confined to plantation sector companies in Malaysia and is based on a sample of 39 firms which listed in Bursa Malaysia for the period from 2009 to 2019. This study uses two performance measures which are ROA and ROE as the dependent variable. Besides, the capital structure measures are the short-term debt, long-term debt, total debt and firm growth, which as the independent variables. Size will be the control variable in this study. Moreover, a fixed-effect panel regression analysis has been used to analyse the impact of capital structure on firm performance. The results indicate that firm performance, which is in term of ROA, have an insignificant relationship with short-term debt (STD) and long-term debt (LTD). For the total debt (TD) and growth, there is a significant relationship with ROA. However, for the performance measured by ROE, it has an insignificant relationship with short-term debt (STD), long-term debt (LTD) and total debt (TD). Furthermore, there is a significant relationship between the growth and the performance firms from plantation sector in Malaysia.

scholarly journals The Impact of Liquidity on the Capital Structure: Evidence from Malaysia

2016 ◽  
Vol 8 (10) ◽  
pp. 130 ◽  
Author(s):  
Maziar Ghasemi ◽  
Nazrul Hisyam Ab Razak
Keyword(s):  
Capital Structure ◽  
Short Term ◽  
Current Ratio ◽  
Debt Level ◽  
Asset Liquidity ◽  
Independent Variable ◽  
The Impact ◽  
A Company ◽  
The Capital Structure

<p class="Content">For many years, liquidity of a company’s asset and its effect on the optimal debt level has been a controversial issue among scholars in finance studies. Prior studies have demonstrated that in some countries, asset liquidity increased debt level while in other countries liquid companies were less leveraged and more regularly financed by their own capital. This study investigates the effect of liquidity on the capital structure among the 300 listed companies in the Main market of Bursa Malaysia from 2005 to 2013 fiscal years. Pooled OLS is applied to investigate the impact of liquidity ratios on different Debt ratios. Liquidity of a company, which is the independent variable of this study, is measured by two common ratios which are: quick ratio and current ratio. Additionally, the Debt/Equity and Debt/Asset ratios represent the capital structures based on the short-term, long-term and total debt. The results show that all the measures of liquidity have significant impacts on all the proxies of leverage. According to the results, Quick ratio has a positive effect on leverage; although, Current ratio is negatively related to leverage. Moreover, short-term debt is more influenced by liquidity compared to long-term debt.</p>

scholarly journals Capital structure: Empirical evidences of public and non-public firms in Brazil

2015 ◽  
Vol 12 (3) ◽  
pp. 223-232
Author(s):  
Gabriel Hideo Sakai de Macedo ◽  
Joelson Oliveira Sampaio ◽  
Eduardo Flores ◽  
Pedro Luiz Aprigio
Keyword(s):  
Capital Structure ◽  
Cash Flow ◽  
Stock Exchange ◽  
Credit Market ◽  
Convertible Debt ◽  
Short Term ◽  
Private Companies ◽  
Public Companies ◽  
Public Firms

This study seek to contribute to the literature through research focused on companies listed and not listed on the stock exchange. A survey was used to identify the capital structure of Brazilian companies and relate the results to the Brazilian credit market. The results indicate that most of the investigated companies prefer not to issue convertible debt, as well as the share of firms issuing common shares was small. It was found that firms do not have preference between long-term and short-term debt. Finally, it was also noted that private companies have great concern about the volatility of earnings and cash flow. The differential of this research was to analyze the practices adopted by both public companies and privately held

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