scholarly journals Capital Structure and its Impact on Financial Performance in Insurance Companies of Nepal

2020 ◽  
Vol 13 (1) ◽  
pp. 89-106
Author(s):  
Bhupal Jaishi
Keyword(s):  
Capital Structure ◽  
Financial Performance ◽  
Negative Impact ◽  
General Structure ◽  
Insurance Companies ◽  
Debt Ratio ◽  
Return On Assets ◽  
Earnings Per Share ◽  
Total Debt ◽  
The Impact

The paper attempts to examine the relationship between capital structure and the financial performance of Nepalese insurance companies.  Return on assets and earnings per share are the dependent variables. Independent variables are total debt ratio, equity to total assets ratio, size, liquidity and tangibility.  This paper uses descriptive as well as causal-comparative research design to examine the general structure of capital structure and financial performance and their relationship. The data were collected from annual reports of listed insurance companies in Nepal. The study is based on 84 observations from 14 insurance companies of Nepal from 2013/14 to 2018/19. The regression models are estimated to test the effect on financial performance variables i.e. return on assets and earnings per share. The result shows that insurance companies having a high debt ratio have better financial performance. An increase in debt ratio and tangibility increase return on assets and an increase in equity, size and liquidity decrease return on assets in the industry. The impact of the debt ratio and tangibility on earning per share is positive and there is the negative impact of equity, size and liquid ratio on earning per share. The major conclusion of this study is that total debt ratio, equity to total assets ratio, leverage, size, liquidity and tangibility are the significant factors in determining the financial performance of Nepalese insurance companies. The insurance companies of Nepal interested to increase financial performance can increase their total debt ratio and tangible assets and decrease equity, firm size, and liquidity ratio.

scholarly journals Effects of Capital Structure on Financial Performance of Insurance Companies in Nepal

2020 ◽  
Vol 10 (3) ◽  
pp. 35
Author(s):  
Bishnu Prasad Bhattarai
Keyword(s):  
Capital Structure ◽  
Financial Performance ◽  
Annual Report ◽  
Random Effect ◽  
Random Effect Model ◽  
Fixed Effect Model ◽  
Insurance Companies ◽  
Return On Assets ◽  
Total Debt ◽  
Effect Model

The study has examined the effects of capital structure on financial performance of insurance companies in Nepal. Data were collected from the annual report of the respective insurance companies' web site. The panel data of 14 Nepalese insurance companies from 2007/08 to 2015/16, leading to a total of 126 observations. The data were analyzed using pooled OLS model, random effect model and fixed effect model. The study has been return on assets as dependent variable whereas total debt ratio, equity to total assets, leverage, firm size, liquidity ratio and assets tangibility are independent variables. The result concluded that equity to total assets, leverage, and assets tangibility have effects the financial performance in Nepalese insurance companies' cases.

scholarly journals The Impact of Capital Structure on the Financial Performance of the Jordanian Industrial Companies Listed on the Amman Stock Exchange for the Period 2012-2015

2018 ◽  
Vol 9 (2) ◽  
pp. 369
Author(s):  
Shireen Mahmoud AlAli
Keyword(s):  
Capital Structure ◽  
Financial Performance ◽  
Stock Exchange ◽  
Return On Assets ◽  
Return On Equity ◽  
Industrial Companies ◽  
Earnings Per Share ◽  
Amman Stock Exchange ◽  
The Impact ◽  
The Capital Structure

The purpose of this study was to identify the effect of the capital structure as a percentage of total liabilities to total assets on the financial performance of the Jordanian industrial companies listed on the Amman Stock Exchange for the period 2012-2015.The study population included all the Jordanian general industrial companies listed on the Amman Stock Exchange. The sample of the study included 10 industrial companies listed on the Amman Stock Exchange. The linear regression analysis was used to test the relationship between variables using the ordinary least squares method (OLS).The results showed that there is a positive significant impact on the capital structure of the industrial shareholding companies listed in the Amman Stock Exchange as measured by the ratio of equity to total assets, return on equity and return on assets and net earnings per share as an indicator of financial performance.The results also showed a negative significant impact on the capital structure of industrial shareholding companies listed on the Amman Stock Exchange as measured by total liabilities to total assets, return on equity and return on assets as an indicator of financial performance, and net earnings per share as an indicator of the financial performance indicators.

scholarly journals The Impact of Capital Structure on Jordanian Banks Performance

2021 ◽  
Vol 10 (1) ◽  
pp. 35
Author(s):  
Rania Al Omari
Keyword(s):  
Capital Structure ◽  
Financial Performance ◽  
Commercial Banks ◽  
Return On Investment ◽  
Stock Exchange ◽  
Return On Assets ◽  
Return On Equity ◽  
Total Debt ◽  
Amman Stock Exchange ◽  
The Impact

Due to the great importance of the financing structure of banks, the impact of capital structure on the financial performance of banks listed on the Amman Stock Exchange has been examined. To achieve the objectives of this study, we have followed the experimental approach. The study relied on financial variables. The Capital Structure has been measured by the ratios of total debt to total assets and total debt to total equity. Both ratios are independent variables. The dependent variable in this study is the financial performance of banks represented by the ratio of return on assets, the ratio of return on equity, the ratio of return on investment, and the ratio of return on share. The study community and sample consisted of twelve commercial banks listed on Amman Stock Exchange (ASE) during the period (2007-2017). Statistical Package for the Social Sciences (SPSS) software was used in testing of research hypotheses. The most important results are that the capital structure has an impact on return on assets (ROA), while it has no impact on return on equity (ROE), return on investment (ROI) and earnings per share (EPS) in Jordanian commercial banks.

scholarly journals Impact of Capital Structure on the Performance of Textilesector in Pakistan: Examining the Moderating Effect of Liquidity

2019 ◽  
Vol 5 (1) ◽  
pp. 1-12
Author(s):  
Adeel Akhtar ◽  
Allah Bakhsh ◽  
Mehak Ali ◽  
Shazia Kousar
Keyword(s):  
Firm Performance ◽  
Capital Structure ◽  
Performance Measures ◽  
Negative Impact ◽  
Least Square ◽  
Debt Ratio ◽  
Return On Assets ◽  
Return On Equity ◽  
Earnings Per Share ◽  
Equity Ratio

Purpose: The basic aim of this study is to investigate how capital structure influences the performance of firms from textile sector listed at Pakistan Stock Exchange, taking liquidity of the firms as a moderator. Methodology: Data of 30 listed textile firms is taken from their financial statementsfor a period of ten years from 2007 to 2016.Analysis has been conducted using the Ordinary least square (OLS) regression. Two measures of capital structure (debt ratio and debt-to-equity ratio) have been used to find out its impact on three performance measures (return on assets, return on equity, and earnings per share). Findings: The variable, total debt ratio does not have any significant effect on all the three firm performance measures (return on asset, return on equity and earnings per share). Debt-to-equity ratio variable also does not have a significant impact on two firm performance measures (ROA and ROE). It however has a significant, negative impact on EPS. In case of liquidity as a moderator, it is found that liquidity acts as the significant moderator between the debt ratio and return on assets whereas liquidity factor is significant in case of relation between debt –to-equity variable and two performance variables return on assets and earnings per share.. Practical implications: Practically this study is important from managerial perspective as the appropriate decision for choosing a level of capital structure vis-à-vis total assets and total equity is essential for the better performance of the firms.

scholarly journals How Does Debt Financing Affect Financial Performance? A Study of Transport Companies Listed in Pakistan

2020 ◽  
Vol 2 (2) ◽  
Author(s):  
Ulfat Abbas ◽  
Sohail Aziz ◽  
Samina Khan
Keyword(s):  
Financial Performance ◽  
Debt Financing ◽  
Annual Reports ◽  
Transport Sector ◽  
Return On Assets ◽  
Secondary Sources ◽  
Earnings Per Share ◽  
The Impact ◽  
Retained Earnings

  Purpose: The purpose of this paper investigates the impact of debt financing on airline’s (transport) sector performance of Pakistan. Design/Methodology/Approach: We gathered the data from secondary sources. In this study, we used a data sample of 11 years from 2008-2018 by using companies annual reports. Due to unavailability of data, only 3 transport companies have been taken for analysis. The software which we used in analysis is SPSS (Statistical Package for Social Science). Findings: The findings of the study suggests that there is opposite relationship between debt financing and financial performance of airlines. Debt is measured from three ratios, short term debt to total assets, long term debt to total assets and total debt to total assets ratio. For the measurement of performance, we used return on assets and earnings per share. We concluded on the basis of findings that the companies should focus on retained earnings which is cheaper source of finance and use less level of debt. As the more level of debt use by the companies, the performance of companies’ decrease. Implications/Originality/Value: There is only one study is available in Pakistan which used transport sector in Pakistan in debt financing context                                                          

scholarly journals Debt Financing and Firm Performance: Evidence from an Emerging South-Asian Country

2019 ◽  
Vol 10 (1) ◽  
pp. 40
Author(s):  
Mohammad Mazibar Rahman ◽  
Umme Khadija Kakuli ◽  
Shahnaz Parvin ◽  
Ayrin Sultana
Keyword(s):  
Firm Performance ◽  
Capital Structure ◽  
Financial Performance ◽  
Negative Influence ◽  
Short Term ◽  
Return On Assets ◽  
Return On Equity ◽  
Firm Financial Performance ◽  
Total Debt

This paper aims to empirically investigate the impact of capital structure choice on the firm performance of the firms listed under the Dhaka Stock Exchange of Bangladesh. Multiple regression has been employed in this research to determine the relationship between the capital structure and the firm’s financial performance. Three ratios of financial performance, i.e., return on assets, return on equity, and gross margin, have been used as a sample of non-financial Bangladeshi companies, selected from 2010 to 2015. The study records numerous findings. First, the result shows a significant negative influence of long-term debt (LTD) and total debt (TTD) on firm financial performance measured by return on assets (ROA), but no significant relationship is found between short-term debt (STD) and this measure of firm’s financial performance. Moreover, the research found that there is no significant effect of short-term debt, long-term debt and total debt on the firm financial performance measured by return on equity (ROE). Finally, the result shows that a significant negative influence of short-term debt and total debt on firm performance measured by GM, but no significant relationship was found between long-term debt and financial performance. In general terms, the results of this study may suggest that capital structure has a negative influence on firms’ financial performance in Bangladesh.

scholarly journals Does CSR Influence Firm Performance Indicators? Evidence from Chinese Pharmaceutical Enterprises

2019 ◽  
Vol 11 (20) ◽  
pp. 5656 ◽  
Author(s):  
Minghui Yang ◽  
Paulo Bento ◽  
Ahsan Akbar
Keyword(s):  
Firm Performance ◽  
Financial Performance ◽  
Financial Indicators ◽  
Social Dimensions ◽  
Return On Assets ◽  
Environmental Aspect ◽  
Return On Equity ◽  
Earnings Per Share ◽  
Corporate Social ◽  
The Impact

This research is carried out in the backdrop of increasing product quality and environmental degradation scandals associated with Chinese Pharmaceuticals in recent years. We examined the data of 125 Chinese Pharmaceuticals between 2010–2016 to investigate the impact of overall corporate social responsibility (CSR) performance as well as the performance on five unique aspects of CSR such as shareholders, employees, customers and suppliers, environmental practices, and the society to gauge the impact of these individual dimensions on the firm’s financial performance. The Hexun rating system is used to gauge a firm’s CSR performance on various stakeholder dimensions as it is one of the widely accepted CSR measurement criteria in China. The firm performance is measured by Tobin’s Q, return on assets (ROA), return on equity (ROE), and earnings per share (EPS) ratios. The outcome of the panel-based regression models reveals that the overall CSR score has a positive and significant influence on a firm’s financial indicators. Moreover, although all the CSR dimensions relate positively to firm performance, the environmental aspect of CSR has the most profound impact on firm performance followed by customers and suppliers, and employees. However, the shareholders and social dimensions have a relatively lesser influence on firm performance. These results imply that Chinese Pharmaceuticals shall further optimize each aspect of CSR performance as it can not only create a favorable brand image for various stakeholders but also results in sustainable financial performance.

Can Capital Structure Affect the Financial Performance of Banks in Turkey?

2018 ◽  
Author(s):  
Merve Tuncay
Keyword(s):  
Capital Structure ◽  
Financial Performance ◽  
Capital Adequacy ◽  
Return On Assets ◽  
Control Variables ◽  
Return On Equity ◽  
Independent Variables ◽  
Earnings Per Share ◽  
Asset Quality ◽  
The Capital Structure

<p>The aim of this study is to investigate the determinants of banks’ financial performance in terms of the capital structure. Annual financial statements of 11 banks traded in Borsa Istanbul are employed for the period of 2006-2016. Return on assets, return on equity and earnings per share are chosen for financial performance measures. The independent variables related to the capital structure are capital adequacy, equity-to-asset, and financial leverage ratios. In addition, macroeconomic variables and bank-specific variables are also considered as control variables for the analysis. The data are analyzed by the panel data regression analysis as it provides more informative finding and less multicollinearity among variables than time series and cross-sectional analyzes.</p><p>The Hausman test results indicate that the random effects model is appropriate for the whole dependent variables. According to the findings; while equity-to-asset ratio affects return on assets positively, amongst the control variables specific to firms, firm size, asset quality and asset growth variables have significant effects on return on assets. It is found no significant effect of independent variables on return on equity, however, it is seen that asset quality has a negative and significant effect. Inflation and interest rates have a significant effect on both variables. Finally, it is seen that equity-to-asset ratio has a positive and significant effect on earnings per share. Only the effect of asset quality on earnings per share is found to be significant among the control variables. Findings of the study are consistent with the previous studies. In addition, the M&amp;M views are not supported by the findings related to return on assets and earnings per share but the return on equity.</p>

scholarly journals Analisis Dampak Struktur Modal Terhadap Profitabilitas

2018 ◽  
Vol 1 (1) ◽  
Author(s):  
Dwi Setiarini ◽  
Sujiono Sujiono ◽  
Hadi Sumarsono
Keyword(s):  
Capital Structure ◽  
Negative Impact ◽  
Secondary Data ◽  
T Test ◽  
Return On Assets ◽  
Credit Cooperatives ◽  
Equity Ratio ◽  
Data Source ◽  
The Impact ◽  
The Capital Structure

Funding is an important issue that is taken into account by the company, both for the establishment and expansion of the business. Capital structure has an impact on profitability, with the improvement in capital structure, the company gives profits. The purpose of this study was to determine the impact of the capital structure measured by Debt to Equity Ratio (DER) on profitability as measured by Return on Assets (ROA) partially in Sharia Savings and Credit Cooperatives Cooperatives or KSK Komment Year 2016 - 2019. This researcher uses regression analysis simple linear and t test. The data source used in this study is secondary data. The results of the study concluded that the capital structure measured by Debt to Equity Ratio (DER) partially had a negative impact on Return on Assets (ROA). While the t test on the variable Debt to Equity Ratio (DER) partially proved to have no significant impact on Return on Assets (ROA).

scholarly journals Ownership Structure, Corporate Governance and Capital Structure of Non-Financial Firms of Pakistan

2018 ◽  
Vol 10 (1) ◽  
pp. 31-46
Author(s):  
Hassan Ahmad ◽  
Nasreen Akhter ◽  
Tariq Siddiq ◽  
Zahid Iqbal
Keyword(s):  
Corporate Governance ◽  
Capital Structure ◽  
Ownership Structure ◽  
Negative Impact ◽  
Institutional Ownership ◽  
Board Independence ◽  
Managerial Ownership ◽  
Debt Ratio ◽  
Significant Negative Impact ◽  
The Impact

This study is undertaken with the purpose of investigating the impact of ownership structure and corporate governance on the capital structure of Pakistani listed firms from 2011-2014, feasible general least square is used to investigate the impact of ownership structure and corporate governance on capital structure of KSE 100 index firms. Explanatory variables include ownership concentration, managerial ownership, foreign ownership, institutional ownership, board size, board independence and CEO duality along with the three control variables namely firm size, firm profitability and liquidity. There is insignificant positive relationship between ownership concentration and capital structure, managerial ownership has a significant negative impact on debt ratio. Foreign ownership has also a significant negative impact on firm capital structure and institutional ownership has significant positive impact on capital structure. Board size is positively related to capital structure, board independence also positively related to firm’s debt ratio but CEO duality negatively related to the dependent variable, all these variables have significant impact on capital structure of Pakistani firms. 

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