scholarly journals Impact of Capital Structure on Firm’s Performance: Focusing on Non-financial Listed Egyptian Firms

2019 ◽  
Vol 10 (6) ◽  
pp. 78 ◽  
Author(s):  
Ahmed Sakr ◽  
Amina Bedeir

The purpose of this paper is to investigate the impact of capital structure decisions on the performance of the firm. The investigation has been performed using a data of 62 listed non-financial Egyptian firms over a period of fourteen years from 2003-2016. This study used two measures for performance the dependent variable which are ROA and ROE, the most common used measures agreed upon on the majority of previous studies. Whereas, for the independent variable “the capital structure, the study uses the three measures of capital structure which are total debt to total assets (TD), total short-term debt to total assets (STD), and total long-term debt to total assets (LTD). The results showed when using ROA as a measure of performance, a significant negative impact of capital structure (TD, STD, and LTD) exists; while in case of using ROE as a measure of performance, there’s a significant negative impact of capital structure only when using STD, otherwise a positive significant impact of capital structure exist.

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

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.


2016 ◽  
Vol 8 (10) ◽  
pp. 130 ◽  
Author(s):  
Maziar Ghasemi ◽  
Nazrul Hisyam Ab Razak

<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>


Author(s):  
Do Huy Thuong ◽  
Tran Luu Ngoc ◽  
Nguyen Thi Phuong Hong

Considering the impact of the capital structure on the effectiveness of businesses is extremely important. Therefore, this study is conducted in order to find the influences of capital structure, firm size and revenue growth on the performance of the garment businesses listed on Vietnam stock market in the period of 2013-2018 with the representation of return on equity (ROE). The research with the use of panel data has shown that the ratio of short-term debt on total assets, the firm size and the revenue growth all have positive impacts on business performance. Meanwhile, the ratio of long-term debt on total assets has a negative impact on the performance of garment businesses at the statistically significant level of 5%.


2018 ◽  
Vol 5 (2) ◽  
pp. 1-6
Author(s):  
Hishan S Sanil ◽  
Ahmad Amirul Arsyad bin Noraidi ◽  
Suresh Ramakrishnan

This research is conducted to determine the impact of different firm sizes on the relationship between capital structure determinants and leverage among listed consumer product firms in Malaysia from year 2006 to 2015. All data was taken from annual report of the companies by using DataStream. In 2015, 130 firms were listed in Bursa Malaysia under the consumer product sector. However, only 108 firms were observed as several firms had insufficient data. This study uses the dependent variable of debt ratios i.e. short-term debt, long-term debt and total debt. The independent variables used are firm size, profitability, tangibility, liquidity, growth, non-tax debt shield and business risk. Those results were obtained by applying Pooled OLS and Fixed Effect Analysis. The main finding of this study is that different firm sizes will affect the relationship between capital structure determinants and leverage. The Fixed Effect analysis revealed that all determinants were significant across all types firm sizes. Furthermore, non-tax debt shield had the largest impact to all types of leverage across different firm sizes.


Author(s):  
Bernard Wilson ◽  

The influence of capital structure on deposit money bank financial performance was explored in this study. The secondary data was gathered from the annual reports and accounts of the 14 sampled Deposit Money Banks from 2014 to 2018, and generalized least square multiple regression was used to evaluate the secondary data. According to the findings, total debt to total assets, total debt to total equity, and long-term debt to total assets have little bearing on the financial performance of Nigerian banks. The study also discovered that the ratio of short-term debt to total assets has a considerable influence on a bank's financial success. In light of the findings, it is suggested that bank management strive diligently to reduce the short-term debt to total assets component of their capital structure, since this has a detrimental impact on their financial performance. They also have a tendency to enhance the ratio of total debt to total assets since it improves their financial performance. Long-term debt to total assets ratios should be reduced in capital structure components since they have a negative impact on financial performance.


2018 ◽  
Vol 10 (7) ◽  
pp. 2465
Author(s):  
Laura Brad ◽  
Gabriel Popescu ◽  
Alina Zaharia ◽  
Maria Claudia Diaconeasa ◽  
Daniela Mihai

The importance of agricultural financing in ensuring food security and safety, jobs, poverty reduction, economic growth and more recently, climate change mitigation, natural resource conservation and sustainable development imposes periodic analysis of the factors which might influence the farmers’ financial situation, in order to improve it. One way of assessing this is to analyze the agricultural debt. In this context, based on previous models, the paper aims to assess the impact of specific factors on the agricultural debt level in the European Union during 2008–2015, as these should be considered in future common agriculture policies as well as in achieving sustainable agriculture. The research was conducted based on econometric techniques, by applying panel models in the Eviews 7.0 software-64 bit version. More than 20 variables were considered in the analysis. Some of the findings suggest that an increase in subsidies as well as the share of cash flow in the total existing capital would determine considerable reductions of the total debt. Decoupled subsidies seem to have a higher impact than coupled subsidies on short term debt, while its value is between the one found for coupled subsidies in the case of long term debt. Large farms/companies, to which decoupled payments are granted, have higher debts on long run and on total debt. The same units, to which coupled subsidies were granted, have smaller short-term debt. In contrast, the increases of labor costs, fixed costs, and crop/livestock costs lead to an increase in the total debt, since the farms require additional financial resources to cover the expanded costs. Also, the results suggest that short-term debts are mainly formed of long-term loans that reached maturity. In this case, the authors support the idea of differentiated financing programs for the agricultural activities because of their peculiarities and reinforced by the need to turn the intensive agriculture into a sustainable and plentiful one.


2020 ◽  
Vol 3 (1) ◽  
Author(s):  
Grace Amin

Bullying is deliberate aggressive action, using an imbalance of strength physically or mentally by hurting physical, verbal, or emotional / psychological forms repeatedly. In the last decade, cases of bullying in Indonesia continue to increase and if not handled properly will increasingly have a negative impact on the development of the children of the nation's next generation. Bullying does not only affect children who are bullied but can also affect children who bully, children who witness bullying. Some of the effects of bullying include anxiety, depression, and low self-esteem. The purpose of community engagement is to socialize the impact of bullying and how to increase self-esteem to adolescents. Through psychoeducation programs in adolescents such as schools and teenagers religious communities in the Cikarang - Bekasi region, young people gain an in-depth understanding of bullying, its effects and how to increase their confidence. Through this psychoeducation, teenagers understand the understanding, types and effects of bullying both short term and long term so they promise to resist bullying starting from themselves. Teenagers learn that humans are social beings who need each other. They learn about the meaning of diversity and bhineka tunggal ika and try to implement it in their next lives by respecting the differences in their environment. These teenagers learn to respect themselves more, see the positive things that God has given them. They try to always believe in themselves that they are perfect and valuable beings in God's eyes so that even though the environment around them may not appreciate, they can still see positive things in themselvesABSTRAK:Bullying adalah tindakan agresif yang disengaja, menggunakan ketidakseimbangan kekuatan secara fisik atau mental dengan cara menyakiti bentuk fisik, verbal, atau emosional/ psikologis secara berulang – ulang. Dalam satu decade terakhir, kasus bullying di Indonesia terus meningkat dan bila tidak ditangani dengan baik akan semakin berdampak negative bagi perkembangan anak – anak generasi penerus bangsa. Tindakan bullying tidak hanya berdampak pada anak yang di-bully tetapi juga dapat berdampak pada anak yang mem-bully, anak yang menyaksikan bullying. Beberapa dampak bullying diantaranya kecemasan, depresi, serta rendahnya harga diri (self-esteem). Tujuan dari pengabdian kepada masyarakat ini adalah untuk mensosialisasikan dampak bullying serta cara meningkatkan self-esteem kepada para remaja. Melalui program psikoedukasi di lingkungan remaja seperti sekolah maupun komunitas keagamaan remaja wilayah Cikarang – Bekasi, para remaja mendapatkan pemahaman mendalam mengenai bullying, dampaknya serta bagaimana cara meningkatkan kepercayaan diri mereka. Melalui psikoedukasi ini, para remaja memahami pengertian, jenis serta dampak bullying baik jangka pendek maupun jangka panjang sehingga mereka berjanji untuk bersikap menolak bullying mulai dari diri mereka sendiri. Para remaja belajar bahwa manusia adalah mahluk social yang saling membutuhkan. Mereka belajar tentang makna keberagaman dan Bhineka Tunggal Ika serta berusaha mengimplementasikannya dalam kehidupan mereka selanjutnya dengan cara menghargai perbedaan yang ada di lingkungannya. Remaja ini belajar untuk lebih menghargai diri mereka, melihat hal positif yang telah diberikan Tuhan kepada mereka. Mereka mencoba untuk selalu menanamkan dalam diri bahwa mereka adalah mahluk yang sempurna dan berharga di mata Tuhan sehingga walaupun lingkungan di sekitar mereka mungkin tidak menghargai, mereka tetap dapat melihat hal positif dalam diri mereka.


2005 ◽  
Vol 1 (1) ◽  
pp. 20
Author(s):  
Ari Christianti ◽  
Murti Lestari

The study aims at empirically proving and analyzing the balance model of Capital Asset Pricing Model (CAPM with the multifactor of risks, consisting of: outstanding stocks value, capital structure represented by Debt EquiQ Ratio (DER), market risk as represented by stock market beta, and the interest rate on company return on stock.This research uses a dynamic model approach considering the existence of the weaknessesin a classic linear model. Since the investment is related to investors behavior that need a lag to market change, the use of the dynamic model approach will be better. It is because the dynamic model uses autoregressive approach containing the lag. The dynamic model used here is Partial Adjustment Model (PAM) and Error Correction Model (ECM).  Based on the estimation of the PAM model it is proven that the model is inefficient in finding the evidence confirming the hypothesis. Subsequently,based on the result of the examination of the ECM model it isconcluded that outstanding stocks value has a positive and signiJicant impact in short term and a negative impact in long term. It means that in the short term outstanding stocks value serves as the consideration for investors in making an investment. However in the long term they are likely to believe that the use of smaller internal capital proportion will be more beneficial for them. The capital structure has only a longierm impact on the return on stock. It means that the impact of DER on stock return on miscellaneous industry sector needs the quite long lag to influence the investors in determining stocks return. It indicates that in the long term they believ:e that the use of increasing number of loan will causes the decrease in company liquidity. Consequently, the opportunity for the company to go bankrupt is bigger Beta stock in the study has a negative impact in the long term. Theoretically, it is not consistent with the parameter direction and indicated that beta stock does notserve as an app;r,pviate prory in measuring the rislcs on. miscellaneous industry sector The interest rate has in the long term a negative impact on stocks return and needs the long lag to influence the investors in determining the return on stocks.Keywords: Stock return, outstanding stock value, DER (Debt Equity Ratio), beta, interest rote, ECM (Eruor Correction Model)


1982 ◽  
Vol 16 (4) ◽  
pp. 757-780 ◽  
Author(s):  
Nader Fergany

Labor migration among Arab countries is the most important phenomenon in the political economy of that region at present and will remain so for some time. The focus of this article is the impact of emigration on national development in labor sending countries experiencing wide-scale emigration, the main contention being that, due to the characteristics of contemporary labor movements among Arab countries, there obtains a contradiction between short term benefits and long term adverse effects. The article briefly defines development, then presents empirical evidence from the Yemen Arab Republic of the negative impact of labor emigration.


Pravaha ◽  
2020 ◽  
Vol 25 (1) ◽  
pp. 149-158
Author(s):  
Prem Lal Rajbanshi

This study examines the effect of profitability, liquidity, size, tangibility and tax shield on capital structure of Nepalese Hydropower Companies. Debt ratio and long term debt to total assets ratio are taken as dependent variable and Profitability, liquidity, size, tangibility and tax shield are as independent variable. The study reveals that tangibility and non debt tax shield are positively influence the total debt where as profitability and liquidity are negatively influence on the total debt decision of the Nepalese Hydropower Companies. The regression coefficients for size are neither consistent nor statistically insignificant in all regression equations indicating that size variable is not the major factor of determinant of total debt as well as long term debt.


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