Download or read book The Effect of Profit Margin on Capital Structure written by Rathiranee Yogendrarajah and published by . This book was released on 2014 with total page 11 pages. Available in PDF, EPUB and Kindle. Book excerpt: Profit margin is a way of measuring how well a company is doing, regardless of size of the organizations. The capital structure is how a firm finances its overall operations and growth by using different sources of funds. The successful selection and use of the debt-to-equity ratio is one of the key elements of firms' financial strategy. The profit margin is a key element to determine the capital structure. The firms may have their retained earnings to increase their capital structure. The purpose of this study is to investigate the effects of profit margin on Capital Structure of listed manufacturing companies in Sri Lanka. The present study tries to investigate the relationship between net profit margin on sales and debt-to-equity ratio by taking into consideration in the level of firms' investment. The research question is arisen “What extent the profit margin affects the capital structure?” For this purpose 13 listed manufacturing companies in Colombo stock exchange in Sri Lanka have been selected for the period of 2005-2009. The data have been analyzed by using correlation and regression analysis to find out the association between the variables. In our study we may say that the firms finance their investment activities by retained profits are more profitable than those that finance their activities through borrowed capital and it depends on their level of investments.

Download or read book The Effect of Capital Structure on Profitability of Energy American Firms written by Mohamed Tailab and published by . This book was released on 2018 with total page 8 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper empirically aims to analyze the effect of capital structure on financial performance.Two main sets of variables were used: For profitability, return on assets (ROA) as the ratio of net income to total assets, and return on equity (ROE) as the ratio of net income to total shareholders' equity were adopted as a proxy for financial performance; and to indicate capital structure, short-term debt, long-term debt, total debt, debt to equity ratio, and firm's size were used. A sample of 30 Energy American firms for a period of nine years from 2005 - 2013 was considered. Secondary data were collected from financial statements which were taken from Mergent online. The data were analyzed by using Smart PLS (Partial Least Square) version 3. Multiple regressions indicated that 10% of ROE and 34% of ROA were predicted by the independent variables. Findings also presented that the total debt has a significant negative impact on ROE and ROA, while size in terms of sales has significantly negative effect only on ROE of the American firms. However, a short debt significantly has a positive influence on ROE. An insignificant either negative or positive relationship was observed between long term debt, debt to equity and size in terms of total assets and profitability. A generalization of the results is limited because of the small sample size. For future research, the author suggests addressing a longer period of time with a large sample size of firms. It would be more accurate if future studies included more independent variables such as taxation and concentration.

Download or read book Capital Structure and Its Impact on Firm Performance written by Kajananthan Rajendran and published by . This book was released on 2014 with total page 8 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper examines the relation between capital structure and firm performance. The main objective of this study is to examine the relationship between capital structure and firm performance in listed manufacturing firms in Sri Lanka. In a way, the present study is initiated on “capital structure and firm performance “with the samples of 25 manufacturing companies using the data representing the periods of 2008-2012. Gross profit, net profit, returns on equity and return on assets, were used as the measures of firm performance whereas debt equity ratio and debt assets ratio were used as the measures of capital structure. The statistical tests were used includes: descriptive statistics, correlation and regression analyses. The results show that gross profit, net profit, return on equity, return on assets, are not significantly correlated with debt equity ratio and Gross profit margin and Return on equity are significantly correlated with debt assets ratio as the measures of capital structure and capital structure has significant impact on gross profit and return on equity. The study only used data from the 2008-2012 annual reports. However, the findings have highlighted the effects of the firm performance and capital structure. The study contributes to literature in Sri Lanka. Furthermore, the finding of the paper can be considered as helpful for managers and users that are anxious to develop financial description quality and practices of capital structure.

Download or read book Profit Margins and Prices written by Russell Taylor and published by . This book was released on 1949 with total page 44 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book The Effect of Capital Structure on Firms Profitability written by Tariku Negasa and published by LAP Lambert Academic Publishing. This book was released on 2013 with total page 80 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book aims to investigate the effect of capital structure on firms' profitability with special emphasis on Ethiopian large private manufacturing firms. This book contributes a piece of empirical evidence for a theory of capital structure, in Ethiopian context. The decision regarding firm's capital structure choice is an important issue for financial managers, because it is very much influential on the firm's profitability and value. In today's dynamic business world, for a sound operation the companies, financial managers' decision regarding capital structure should have to have a greater consideration on searching of its optimum level. In general, the firm's capital structure decision affects the two major objectives of financial management, i.e. firm's profit maximization and shareholders' wealth maximization.

Download or read book Capital Structure and Firm Performance written by Arvin Ghosh and published by Routledge. This book was released on 2017-07-05 with total page 143 pages. Available in PDF, EPUB and Kindle. Book excerpt: Capital structure theory is one of the most dynamic areas of finance and forms the basis for modern thinking on the capital structure of firms. Much controversy has resulted from comparisons of the theory of capital structure originally developed by Franco Modigliani and Merton Miller to real-world situations. Two competing theories have emerged over the years, the optimal capital structure theory and the pecking order theory.Arvin Ghosh begins with an overview of the controversies regarding capital structure theories, and then statistically tests both the optimal capital structure and pecking order theories. Using the binomial approach he analyzes the determinants of capital structure while discussing the role of market power in determining capital structure decisions. Ghosh probes the questions of new stock offerings and stockholders' returns, and analyzes capital structure and executive compensation. He then looks into debt financing ownership structure, and the controversal relationship between capital structure and firm profitability. Finally, he discusses the latest developments in the field of capital structure.A concise overview of a major issue in business economics and finance, this volume provides a fuller understanding of capital structure influence on the financial performance of firms, and will certainly stimulate further debate. While hundreds of scholarly articles have been written on the subject this is the first book to test competing theories against measurements of firms' performance and their underlying capital structure.

Download or read book The Little Book of Valuation written by Aswath Damodaran and published by John Wiley & Sons. This book was released on 2011-03-29 with total page 269 pages. Available in PDF, EPUB and Kindle. Book excerpt: An accessible, and intuitive, guide to stock valuation Valuation is at the heart of any investment decision, whether that decision is to buy, sell, or hold. In The Little Book of Valuation, expert Aswath Damodaran explains the techniques in language that any investors can understand, so you can make better investment decisions when reviewing stock research reports and engaging in independent efforts to value and pick stocks. Page by page, Damodaran distills the fundamentals of valuation, without glossing over or ignoring key concepts, and develops models that you can easily understand and use. Along the way, he covers various valuation approaches from intrinsic or discounted cash flow valuation and multiples or relative valuation to some elements of real option valuation. Includes case studies and examples that will help build your valuation skills Written by Aswath Damodaran, one of today's most respected valuation experts Includes an accompanying iPhone application (iVal) that makes the lessons of the book immediately useable Written with the individual investor in mind, this reliable guide will not only help you value a company quickly, but will also help you make sense of valuations done by others or found in comprehensive equity research reports.

Download or read book The Cost of Capital written by Wilbur G. Lewellen and published by . This book was released on 1976 with total page 148 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Superstar Firms written by Gadiel Ramírez Rodríguez and published by . This book was released on 2022 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: "In this doctoral dissertation we investigate the capital structure of superstar firms and how the same forces behind their creation differentially affect peer industry firms. Using a quintile distribution of industry operating profit margins (Lerner Index) to proxy for the within industry market power distribution we were able to improve the descriptive capabilities of the typical analyses of leverage evolution and capital structure regression. Our leverage evolution analysis confirms that within industry competition has waned over time, going from a competitive state (1973-1982) to a concentrated state (2010-2020). A key characteristic of industry superstars is their ability to withstand macroeconomic factors better than peers. Innovation helps firms compete for stardom, but reigning stars do not appear particularly innovative. The series are shown to financially behave as two distinct power blocks which suggests the existence of a threshold value for both market power and industry concentration. Our regression analyses confirm a dynamic relation between financial leverage and market power (industry concentration). Aggregating data along the within-industries channel of leverage variation reveals that the high-power block increasingly substitutes profit margin benefits for those provided by financial debt. The low-power block, limited in options, uses debt strategically weighting the benefits of financial debt against distress costs and expropriation risks. When the data is instead aggregated along the between-industries channel, industry concentration progressively reduces aggregate levels of corporate debt within the high-concentration block of industries. For the low-concentration block of industries, characterized by healthy levels of industry competition, neither profit margins nor distress costs seem to be a factor. However, along these two channels debt levels are shown to increase with profitability which indicates the strategic perspective implicit in these results. It also explains why it would be difficult for basic regression models to describe such a dynamic interaction as they lack the full spectrum of the industry (concentration) effects on the financial structure of firms (industry). In fact, our results show that even at the individual firm level, the inclusion of the market power distribution for the industry improves the descriptive power of the regression model".

Download or read book The Effect of Capital Structure on the Cost of Capital written by Alexander Barges and published by Englewood Cliffs, N.J., Prentice-Hall. This book was released on 1963 with total page 152 pages. Available in PDF, EPUB and Kindle. Book excerpt: Originally submitted as thesis, Northwestern University. Bibliography: p. 119-121.

Download or read book Emotional Contagion written by Elaine Hatfield and published by Cambridge University Press. This book was released on 1994 with total page 256 pages. Available in PDF, EPUB and Kindle. Book excerpt: A study of the phenomenon of emotion contagion, or the communication of mood to others.

Download or read book Impact of Capital Structure on Profitability written by Owen Ncube and published by . This book was released on 2021 with total page 74 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Effect of Capital Structure on the Cost of Capital written by Alexander Barges and published by Hassell Street Press. This book was released on 2023-07-18 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book explores the relationship between capital structure and cost of capital. Barges delves into key concepts that help explain how a company's financing choices affect its overall cost of capital. Whether you are an investor, corporate finance professional, or student, this book is an essential read for understanding the intricacies of capital structure. This work has been selected by scholars as being culturally important, and is part of the knowledge base of civilization as we know it. This work is in the "public domain in the United States of America, and possibly other nations. Within the United States, you may freely copy and distribute this work, as no entity (individual or corporate) has a copyright on the body of the work. Scholars believe, and we concur, that this work is important enough to be preserved, reproduced, and made generally available to the public. We appreciate your support of the preservation process, and thank you for being an important part of keeping this knowledge alive and relevant.

Download or read book Profits and Capital Structure written by Murray Z. Frank and published by . This book was released on 2014 with total page 42 pages. Available in PDF, EPUB and Kindle. Book excerpt: In the static trade-off theory, when profits increase, the firm should issue more debt and reduce equity to shield the profits from taxation or agency abuse. When a corporate leverage ratio is explained by firm profits, it is well-known that a negative regression coefficient is usually found. The literature (e.g., Myers (1993), Fama and French (2002), and Welch (2007)) considers this negative relationship to be a particularly serious rejection of the static trade-off theory.In this paper, we show that the literature has misinterpreted the evidence as a result of the wide-spread use of familiar, but inappropriate, empirical methods. We make four main points.1. We show that highly profitable firms do actually tend to issue debt and repurchase equity. The least profitable firms tend to reduce debt and issue equity. These facts are empirically very robust.2. Firm size plays an important mediating role in this relationship that gets hidden when leverage ratios are used. Large firms tend to be more active in the public debt markets, while small firms tend to be relatively more active in the equity markets.3. The type of empirical work that is appropriate depends on the model to be tested. We present a simple static trade-off agency-based model of capital structure. According to the model, the appropriate testing structure is a pair of regressions: one explaining debt, and the other explaining equity. When we estimate this model, we find the model's predictions perform rather well. Profits are not properly exogenous according to the model. We discuss how to deal with the exogeneity problem within the context of the model.4. In the model, issuing decisions depend on market conditions ('market timing'). Empirically, bad market conditions have a particularly strong impact on small and low-profit firms. Larger and more profitable firms are less strongly affected by market conditions.Contrary to what is usually believed, the empirical evidence on profits and capital structure seems easy to interpret from the perspective of the static trade-off theory.

Download or read book Analysis of Capital Structure and Its Effects on Profitability written by Doma Rema Marak and published by . This book was released on 2021 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Essays on Capital Structure and Trade Financing written by Klaus Hammes and published by Department of Economics School of Economics and Commercial Law Go. This book was released on 2003 with total page 188 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Financialisation and Poverty Alleviation in Ghana written by Francis Boateng Frimpong and published by BRILL. This book was released on 2021-11-22 with total page 285 pages. Available in PDF, EPUB and Kindle. Book excerpt: Francis Frimpong argues that the exponential growth of finance and credit infrastructures in Ghana did not alleviate poverty in the country. It has, however, resulted in rising financial profits, financialising poverty and stagnating the real sector of the economy