scholarly journals Profitability and Development of Indian firms based on Financial Dynamics

2020 ◽  
Vol 8 (6) ◽  
pp. 4204-4209
Keyword(s):  
Capital Structure ◽  
Growth And Development ◽  
Cost Of Capital ◽  
Service Development ◽  
Debt Ratio ◽  
Optimal Capital Structure ◽  
Financial Factors ◽  
Fundamental Reason ◽  
Optimal Capital ◽  
The Capital Structure

The Judicial blend of debt and equity at which cost of capital is least and estimation of the firm is most maximum is named as optimal capital structure of a firm. The capital structure decision can impact the estimation of the firm through the profit accessible to the investors which amplify the investors' wealth, notwithstanding this capital structure can influence the estimation of the organization by improving its expected income. Hence, the debt ratio changes when there is an irregularity between inside assets and genuine speculation openings and there is data asymmetry in the market. The significance of a proper capital structure is, along these lines, self-evident. Primary variables affecting Capital Structure have been examined right now distinguish the degree of their capital structure impact. The fundamental reason for existing is to look at the effect of "ten financial factors" in particular: profitability, size, risk in the business, asset structure, debt service, development, office cost, bankruptcy ratio, charge shield in tax and uniqueness on the capital structure of chosen organizations, which is spoken to by LEV D/E. Ten unique divisions from Indian corporate have been picked, to break down the significant determinants of capital structure. The information has been drawn from the official sites of the organizations for a time of 2008 to 2018; the information has been gathered for 400 recorded organizations from ten chose segments with the end goal of investigation. Multiple regressions have been applied to discover the noteworthy determinates. Profitability, Growth and Development of the firm, size have pivotal and positive relationship with leverage.

scholarly journals Levered-Beta and Cost of Capital Sensitivities: An Experimental Investigation in Capital Structure

2021 ◽  
Vol 14 (4) ◽  
pp. 152
Author(s):  
Kudret Topyan
Keyword(s):  
Capital Structure ◽  
Cost Of Capital ◽  
Weighted Average ◽  
Debt Ratio ◽  
Bond Ratings ◽  
Optimal Capital Structure ◽  
Rating Method ◽  
Optimal Capital ◽  
The Cost ◽  
The Impact

Using US firms with over $5b market cap, this paper tests the impact of levered beta on the firm’s market value and optimal capital structure. Using the synthetic rating method in a recursive model, the paper shows the current and optimal weighted average cost of capital sensitivities as the firm’s market risk measured by beta changes. The paper shows that the change in the value of beta due to alternative leverage levels or other risk factors will alter the cost of capital insignificantly and has no impact on the optimal capital structure due to those firms’ extra-strong bond ratings. As a side-benefit of the synthetic rating method, one may also observe the market-level variables’ impacts on the cost of capital computations and the optimal debt ratio. The paper uses Disney Corporation to show how the synthetic rating methodology helps to disclose the sensitivities of hypothetical alternative leverages.

scholarly journals ANALISIS STRUKTUR MODAL YANG OPTIMAL PADA PT. TELEKOMUNIKASI INDONESIA, Tbk PERIODE 2004-2008

2017 ◽  
Vol 6 (2) ◽  
Author(s):  
Arnold Japutra ◽  
Winda Wijaya
Keyword(s):  
Decision Making ◽  
Capital Structure ◽  
Average Cost ◽  
Cost Of Capital ◽  
Weighted Average ◽  
Return On Equity ◽  
Optimal Capital Structure ◽  
Optimal Capital ◽  
A Company ◽  
The Capital Structure

<p>Capital structure is one of the most important elements in a company. Decision-making errors in the capital structure may cause a very big impact and it can force the company into bankruptcy. Therefore, in order to continue operating, a company should have an optimal capital structure. Optimal capital structure is achieved at the lowest cost level and the highest level return on equity. The research objective is to measure the financial performance of PT Telekomunikasi Indonesia, Tbk by analyzing the composition of capital structure, ACC, ROE, and whether the capital structure by the years 2004-2008 were optimal or not. From the results of the research, capital structure of PT Telekomonikasi Indonesia, Tbk during the years 2004 -2008 showed an optimal capital structure. The result can be seen as the ROE produced by the company is bigger compared to Weighted Average Cost of Capital (WACC) for each period.</p><p>Key words : Capital structure, return on equity, Weighted Average Cost of Capital</p>

scholarly journals The influence of profitability, size, and growth on the capital structure in consumer goods companies

2019 ◽  
Vol 7 (2) ◽  
Author(s):  
Yovilanda Anggraeni Puspitasari ◽  
Diah Ekaningtias
Keyword(s):  
Regression Analysis ◽  
Capital Structure ◽  
Consumer Goods ◽  
Stock Exchange ◽  
Study Data ◽  
Optimal Capital Structure ◽  
Internal Funds ◽  
Optimal Capital ◽  
Operational Activities ◽  
The Capital Structure

Capital structure is a very important element needed by companies to conduct the companies’ operational activities. Companies must determine whether to use internal funds first or external funds to finance investment in getting an optimal capital structure. The purpose of this study is to examine the influence of the variables of profitability, size and growth on the capital structure in consumer goods companies. Multiple regression analysis is used to analyze the data in this study. Data analysis is conducted on consumer goods companies listed on the Indonesia Stock Exchange period 2012-2016. Based on the analysis, it is found that profitability, size, and growth have an effect on capital structure in consumer goods companies listed on the Indonesia Stock Exchange 2012-2016.

scholarly journals Building an optimal capital structure of start‑ups

2017 ◽  
Vol 48 (3) ◽  
Author(s):  
Monika Burżacka
Keyword(s):  
Capital Structure ◽  
Financial Management ◽  
Financial Structure ◽  
Financing Structure ◽  
Factors Affecting ◽  
Optimal Capital Structure ◽  
Particular Solution ◽  
Optimal Capital ◽  
Start Ups ◽  
The Capital Structure

Effective financial management and optimal capital structure are important for companies to obtain better operational performance. The purpose of this study is the review of the most important theories in terms of optimal financial structure and to explore the most important factors affecting decisions in that area. A bad decision about the capital structure may lead to financial lack of balance and even to bankruptcy. There are many alternative theories on how to build optimal capital structures, which, as indicated by practice, may occur to be insufficient. There is no significant studies that clearly indicate the determinants of a particular solution in the financial structure of companies, especially those referred to as startup companies, mainly because of specifics of that group of companies. It is not possible to indicate which of the leading approaches to the capital structure more fully describes the decisions of start‑ups as to the financing structure. Nevertheless, the results indicate that managers of companies often include similar decisions competitors and modulate the policy of his company within the capital structure for a particular, market standard, which is confirmed by Abdulsaleh and Worthington.

ANALISIS FAKTOR-FAKTOR YANG MEMPENGARUHI STRUKTUR MODAL PADA PERUSAHAAN BATUBARA

2020 ◽  
Vol 3 (2) ◽  
pp. 109
Author(s):  
Rahmad Fuadiantoni ◽  
Suratna Suratna ◽  
Indro Herry Mulyanto
Keyword(s):  
Capital Structure ◽  
Growth Rates ◽  
Financial Management ◽  
Stock Exchange ◽  
National Development ◽  
Sales Growth ◽  
Optimal Capital Structure ◽  
Optimal Capital ◽  
Operating Leverage ◽  
The Capital Structure

Rahmad Fuadiantoni, Student Identity Number 152140102, Business Administration Study Program, Faculty of Social and Political Sciences, National Development University "Veteran" Yogyakarta. Title of research Analysis of Factors Affecting Capital Structure of Coal Companies Listed on Indonesia Stock Exchange Period 2012-2016. Advisor Suratna and IndroHerry Mulyanto.This study aims to determine the factors that affect the capital structure of coal companies listed on the Indonesia Stock Exchange either partially or simultaneously. This type of research is explanatory research. The sampling technique used is purposive sampling. Of the 22 coal companies listed on the Indonesia Stock Exchange, only 19 companies were taken as samples, because they have complete financial statements for 2012-2016. The analysis technique used is multiple linear regression analysis, which was previously tested with the classical assumption test and hypothesis testing using partial t test, simultaneous F test with a level of significance of 5%.The result of this research, asset structure has significant effect to capital structure. This is evidenced by a significance value of 0.017 (p ≤ 0.05). Operating leverage has a significant effect on capital structure. This is evidenced by a significance value of 0.036 (p ≤ 0.05). The level of sales growth has a significant effect on capital structure. This is evidenced by a significance value of 0.028 (p ≤ 0.05). Profitability has a significant effect on capital structure. This is evidenced by the significance value of 0.032 (p ≤ 0.05). Liquidity significantly affects the capital structure. This is evidenced by a significance value of 0.029 (p ≤ 0.05). Asset structure, operating leverage, sales growth rate, profitability, and liquidity simultaneously have a significant effect on the capital structure. This is evidenced by the significance value of F of 0.000 (p ≤ 0.05).          Conclusion, partially asset structure variables, operating leverage, sales growth rates, profitability, and liquidity have a significant effect on the capital structure. While simultaneously asset structure variables, operating leverage, sales growth rates, profitability (ROA), and liquidity have a significant effect on the capital structure. Research suggestions, for companies, companies should have plans and strategies in financial management to establish an optimal capital structure in order to maximize company profits and value. For financial management in determining the optimal capital structure should consider the factors that affect the capital structure of the asset structure, operating leverage, the level of sales growth, profitability, and liquidity. By considering these factors it is expected that the management will be easier in determining the optimal capital structure. For the researcher, for the next research should be able to use or add variables and samples in order to get better results and extend the period or time period in the observation, because the opportunity to obtain more information.

Optimization of the Capital Structure of Telecommunications Companies in Russia

2019 ◽  
Vol 7 (3) ◽  
pp. 4-13
Author(s):  
Елена Филонова ◽  
Yelyena Filonova
Keyword(s):  
Capital Structure ◽  
Financial Management ◽  
Weighted Average ◽  
Financial Statements ◽  
Optimal Capital Structure ◽  
Urgent Task ◽  
Optimal Capital ◽  
Telecommunications Market ◽  
Telecommunications Companies ◽  
The Capital Structure

The choice of optimal capital structure is one of the most important tasks solved by financial management and management of any company. This structure allows you to minimize the weighted average cost of capital and increase the value of the company. The study of problems of optimizing the capital structure and identifying ways to solve them is an urgent task of strategic and financial management. This article presents the results of work in the direction of building the optimal capital structure in the strategic group of competitors of the Russian telecommunications market, which include Rostelecom, Mobile TeleSystems, Megafon, Vympel Communications. The initial informational and statistical base of the performed calculations was the materials of the accounting (financial) statements of the selected companies for 2014–2017.

scholarly journals METHODS OF CORPORATE CAPITAL CAPITAL STRUCTURE OPTIMIZATION

2021 ◽  
Vol 298 (5 Part 1) ◽  
pp. 258-263
Author(s):  
Serhiy FROLOV ◽  
◽  
Mariia DYKHA ◽  
Viktoriia DZIUBA ◽  
◽  
...  
Keyword(s):  
Capital Structure ◽  
Initial Conditions ◽  
Weighted Average ◽  
Structure Optimization ◽  
Financial Leverage ◽  
Optimal Capital Structure ◽  
Advantages And Disadvantages ◽  
Optimal Capital ◽  
The Impact ◽  
The Capital Structure

When forming the optimal capital structure, the choice of methods, approaches, tools is important, which is determined by a set of initial conditions, the need to perform the tasks, achieving results / strategic guidelines. The purpose of the article is to systematize scientific approaches to optimize the capital structure, to clarify the impact of factors on the capital structure of the corporation, which will serve as a basis for ensuring the optimal level of capital structure. As a result of the research, the views of scientists on the optimization of capital structure are systematized, the key aspects of the three main approaches to such optimization are singled out and described. The approaches used in determining financial leverage are described. The expediency of determining financial leverage through the ratio of EPS – earnings per share and EBIT – earnings before interest and taxes is substantiated. The most common methods of capital structure optimization are identified: the method of capital expenditures (the method of minimizing the weighted average cost of capital); the method of determining the effect of financial leverage or the method of maximizing the level of financial profitability; method of determining the complex operational and financial leverage; EBIT-EPS valuation method, Du Pont method, operating profit method and adjusted present value method. Their features, advantages and disadvantages of use are described. The factors influencing financial leverage are systematized, the positive or negative influence of each of the determined factors on financial leverage is determined. A matrix of factors that determine the optimal capital structure in terms of the environment (internal or external) and the implementation of financial policy (at the strategic or operational-tactical levels).

scholarly journals CAPITAL STRUCTURE ANALYSIS TO OPTIMIZE THE PROFITABILITY OF MSMES (CASE STUDY ON MSMES HIKMAH IN SIDOARJO, EAST JAVA, INDONESIA)

2019 ◽  
Vol 1 (2) ◽  
pp. 241-250
Author(s):  
Danur Ramadhani ◽  
Agus Sukoco ◽  
Joko Suyono
Keyword(s):  
Capital Structure ◽  
Cost Of Capital ◽  
Weighted Average ◽  
Financial Statements ◽  
Business Owners ◽  
Optimal Capital Structure ◽  
Descriptive Research ◽  
The Cost ◽  
The Capital Structure

This study aims to analyze the capital structure used to optimize profitability in MSME embroidery shoes. This study uses descriptive research with a qualitative approach. The analytical method is used Weighted Average Cost Of Capital (WACC). The techniques of data collection in this research used interview, observation, documentation and triangulation methods. The data that used are financial transaction records and financial statements issued by the company itself. The results showed that UD. Hikmah used the composition of the capital structure consisting of debt of 20%, 80% own capital with a ROE rate of 170%. Optimization results obtained the optimal capital structure composition on the composition of debt 23% and own capital 77%. By generating a level of profitability that can provide a favorable return for business owners, with the highest calculation of ROE that is equal to 173% and the cost of capital to be borne is Rp.18.238.000 every year.

scholarly journals Determinants of Capital Structure across Industries at Jakarta Stock Exchange

2008 ◽  
Vol 1 (1) ◽  
pp. 99-115
Author(s):  
Christina Christina ◽  
Johan Halim
Keyword(s):  
Capital Structure ◽  
Significant Relationship ◽  
Stock Exchange ◽  
Negative Relationship ◽  
Competitive Environment ◽  
Dividend Payout ◽  
Optimal Capital Structure ◽  
Optimal Capital ◽  
A Company ◽  
The Capital Structure

There are several objectives to be accomplished in this study. The main purpose of this research is to determine the nature of capital structure across non-finance industries in Indonesia, whether they prefer to use debt or equity as their source of financing. Subsequently, factors that influenced the capital structure of a company are then identified. In this study, the company’s profitability, size, and dividend payout are considered as those factors that have relationship with leverage. Finally, this research also conducted to examine whether a company’s capital structure decision affects its growth of shares price. In doing so, multiple regression analysis is used in order to determine whether there is relationship between variables tested. The sample of analysis includes 230 companies listed in Jakarta Stock Exchange from all industries, except finance, in 2006. The findings of this research confirm that, first of all, capital structure varies across industries. Each industry would have different decisions regarding its optimal capital structure, depends on several factors. This leads to the second findings, in which it proves that there is negative significant relationship between profitability and leverage, positive significant relationship between company’s size and leverage, and negative relationship between dividend payout and leverage. Finally, this research also verifies that there is no relationship between leverage and company’s growth of shares price, which means that the growth of shares price is not influenced by the company’s capital structure decision. Capital structure decision plays an important role in maximizing the firm’s value. By having the most optimal capital structure, firms might be able to push its cost to the minimum point, which then assist them in dealing with the competitive environment. Consequently, it is important to determine the factors that influence the capital structure of companies.

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