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 140 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 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 Management Accounting for Decision Makers written by Peter Atrill and published by Pearson Education. This book was released on 2007 with total page 532 pages. Available in PDF, EPUB and Kindle. Book excerpt: This text is an introductory course in management accounting for those seeking an understanding of basic principles and underlying concepts without detailed technical knowledge. It has a strong practical emphasis, with plenty of examples taken from the real world as well as numerical examples with step-by-step explanations.
Download or read book Capital Structure and Corporate Financing Decisions written by H. Kent Baker and published by John Wiley & Sons. This book was released on 2011-03-31 with total page 504 pages. Available in PDF, EPUB and Kindle. Book excerpt: A comprehensive guide to making better capital structure and corporate financing decisions in today's dynamic business environment Given the dramatic changes that have recently occurred in the economy, the topic of capital structure and corporate financing decisions is critically important. The fact is that firms need to constantly revisit their portfolio of debt, equity, and hybrid securities to finance assets, operations, and future growth. Capital Structure and Corporate Financing Decisions provides an in-depth examination of critical capital structure topics, including discussions of basic capital structure components, key theories and practices, and practical application in an increasingly complex corporate world. Throughout, the book emphasizes how a sound capital structure simultaneously minimizes the firm's cost of capital and maximizes the value to shareholders. Offers a strategic focus that allows you to understand how financing decisions relates to a firm's overall corporate policy Consists of contributed chapters from both academics and experienced professionals, offering a variety of perspectives and a rich interplay of ideas Contains information from survey research describing actual financial practices of firms This valuable resource takes a practical approach to capital structure by discussing why various theories make sense and how firms use them to solve problems and create wealth. In the wake of the recent financial crisis, the insights found here are essential to excelling in today's volatile business environment.
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 Capital Structure Earnings Management and Risk of Financial Distress written by Pietro Gottardo and published by Springer. This book was released on 2018-09-24 with total page 103 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book analyzes the impacts that family control of firms has on capital structure choices, leverage and the risk of financial distress, earnings management practices, and the relation between accounting choices and firm market value. For these purposes, longitudinal data on Italian family and non-family non-financial firms are closely analyzed. The Italian setting is of special interest in this context because family businesses account for 94% of GDP, families are particularly committed to maintaining control of firms, and the economy is bank based rather than market based. The analyses draw on the socioemotional wealth approach, which emphasizes the importance of the stock of emotional value in family firms, in combination with financial theories such as Pecking Order Theory, Trade-off Theory, and Agency Theory. The findings cast significant new light on differences between family and non-family firms and the effects of different forms of family influence. The book will have broad appeal for academics, managers, practitioners, and policymakers.
Download or read book Empirical Capital Structure written by Christopher Parsons and published by Now Publishers Inc. This book was released on 2009 with total page 107 pages. Available in PDF, EPUB and Kindle. Book excerpt: Empirical Capital Structure reviews the empirical capital structure literature from both the cross-sectional determinants of capital structure as well as time-series changes.
Download or read book Corporate Capital Structures in the United States written by Benjamin M. Friedman and published by University of Chicago Press. This book was released on 2009-05-15 with total page 404 pages. Available in PDF, EPUB and Kindle. Book excerpt: The research reported in this volume represents the second stage of a wide-ranging National Bureau of Economic Research effort to investigate "The Changing Role of Debt and Equity in Financing U.S. Capital Formation." The first group of studies sponsored under this project, which have been published individually and summarized in a 1982 volume bearing the same title (Friedman 1982), addressed several key issues relevant to corporate sector behavior along with such other aspects of the evolving financial underpinnings of U.S. capital formation as household saving incentives, international capital flows, and government debt management. In the project's second series of studies, presented at the National Bureau of Economic Research conference in January 1983 and published here for the first time along with commentaries from that conference, the central focus is the financial side of capital formation undertaken by the U.S. corporate business sector. At the same time, because corporations' securities must be held, a parallel focus is on the behavior of the markets that price these claims.
Download or read book Impact Of Capital Structure On The Profitability Of Quoted Insurance Companies In Nigeria written by and published by GRIN Verlag. This book was released on 2021-12-03 with total page 67 pages. Available in PDF, EPUB and Kindle. Book excerpt: Studienarbeit aus dem Jahr 2020 im Fachbereich BWL - Bank, Börse, Versicherung, , Sprache: Deutsch, Abstract: The study examines the impact of capital structure on the profitability of Nigerian quoted insurance companies with specific emphasis on AIICO Plc which is one of the 15 quoted insurance companies in Nigeria. The scope covers the period of ten (10) years (2010 to 2020). AIICO PLC was selected based on the criteria of data availability. The study assists financial managers of firms to determine the proportion of equity capital and debt capital (capital structure) to obtain the debt financing mix that will optimize the value of the firm. This study, therefore, has contributed to the literature by examining capital structure and profitability of Nigerian quoted insurance companies. The study aids in the understanding of the impact of capital structure on insurance profitability. This has helped us to understand the impact of capital structure in profitability of Nigeria quoted insurance companies. The outcome from this study will help decisions on capital structure and allow the policy makers in formulating informed policies on capital structure and also to measure the implications of such policies on the operations of quoted insurance companies. This will go a long way in helping investors in deciding whether to pull out their share in pursuance of capital gains or preserve their stake in a corporation. The study will contribute to existing body of knowledge by investigating capital structure and profitability of Nigerian quoted insurance companies.
Download or read book The Effect of Capital Structure on Profitability written by Ahmed Al-Ajlouni and published by . This book was released on 2014 with total page 15 pages. Available in PDF, EPUB and Kindle. Book excerpt: The study aims at exploring the relationship between the capital structure and the profitability (measured by ROI, ROE and NPR) of the petrochemical industry firms in the Kingdom of Saudi Arabia, and the direction of this relation for the targeted firms during the period 2008-2011.The researchers used the simple regression model to estimate the relationship between the independent variable (Debt Ratio) and the measures of the dependent variable (Profitability ratios), this was done by using the Cross Section - Time Series (Panel Data) since it is appropriate for the nature of data (group of firms for a multiple years). The results revealed that there's no significant relationship between capital structure and ROI and ROE, while it showed very week relationship with NPM. This means that the profitability performance of the petrochemical industry firms in KSA is not relevant to capital structure, and there're other factors that affect the profitability of these firms.
Download or read book Business Environment and Firm Entry written by Leora Klapper and published by World Bank Publications. This book was released on 2004 with total page 60 pages. Available in PDF, EPUB and Kindle. Book excerpt: "Using a comprehensive database of firms in Western and Eastern Europe, we study how the business environment in a country drives the creation of new firms. Our focus is on regulations governing entry. We find entry regulations hamper entry, especially in industries that naturally should have high entry. Also, value added per employee in naturally "high entry" industries grows more slowly in countries with onerous regulations on entry. Interestingly, regulatory entry barriers have no adverse effect on entry in corrupt countries, only in less corrupt ones. Taken together, the evidence suggests bureaucratic entry regulations are neither benign nor welfare improving. However, not all regulations inhibit entry. In particular, regulations that enhance the enforcement of intellectual property rights or those that lead to a better developed financial sector do lead to greater entry in industries that do more R & D or industries that need more external finance"--National Bureau of Economic Research web site.
Download or read book Essentials of Canadian Managerial Finance written by John Fred Weston and published by Holt, Rinehart and Winston of Canada. This book was released on 1979 with total page 698 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Effect of Capital Structure on Profitability of Listed Manufacturing Companies in Sri Lanka written by Saratha Anandasayanan and published by . This book was released on 2016 with total page 12 pages. Available in PDF, EPUB and Kindle. Book excerpt: Capital structure is one of the most complex areas of financial decision making due to its interrelationship with other financial decisions variables. Capital structure is the composition of debt and equity capital that comprise a firm's financing its assets and can be rewritten as the sum of net worth plus preferred stock plus long-term debts The problem statement to be analyzed in this study is: Does capital structure affect the listed manufacturing companies in Sri Lanka? The study sample consists of 12 Manufacturing companies listed in Colombo stock Exchange . Net profit ratio is used to measure the profitability. Debt equity ratio, Long term loans to total asset and short term loan to total assets ratios are used to measure the capital structure of the companies. Applying correlations and fixed effect regression analysis, the results reveal significantly negative relation between debt and profitability. This suggests that profitable firms depend more on equity as their main financing option .Yet recommendations based on findings are offered to improve certain factors like the firm must consider using an optimal capital structure.
Download or read book The Capital Structure Decision written by Harold Bierman Jr. and published by Springer Science & Business Media. This book was released on 2012-12-06 with total page 230 pages. Available in PDF, EPUB and Kindle. Book excerpt: In 1958 an academic paper on corporate finance written by two professors (Merton Miller and Frances Modigliani, who were later awarded the Nobel prize for their research efforts) was published in The American Economic Review. One prime conclusion of their paper was that the exact form of a firm's capital structure did not affect the firm's value. Later papers by the same two authors and by many others modified the assumptions and changed this conclusion. We now think that capital structure decisions do affect a firm's value and corporate managers should understand better the financing alternatives that are available. One of the most important financial decisions is the decision to buy or lease assets. The leasing industry is large and getting larger. Unfortunately, it is very easy for a firm to evaluate incorrectly lease alternatives (see Chapter 12). The capital structure decision is one of the three most important financial decisions that management make (the distribution of earnings and the capital budgeting decisions are the other two contenders). Managers should increase their understanding of capital structure alternatives and remember that choosing the best capital structure is an art and not an exact simple calculation. But applying the art can be improved with understanding.
Download or read book Debt and Profitability written by Dr. Sasikanta Tripathy and published by . This book was released on 2019 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Capital structure has been a database issue in financial economics ever since Modigliani and Miller showed in 1958 that given frictionless markets and homogeneous expectations, the capital structure decision of the firm is irrelevant because it does not contribute towards the firm's growth. The dilemma firms are faced with is making a decision on the capital structure choice to use. The purpose of this paper is to find out the effect of capital structure on financial performance of firms based on ROE, ROA, Tobin's Q and EPS for the companies listed both at BSE and NSE over the period 2011-2016, measured through a simple regression model. Results indicate that Capital Structure is significantly and positively associated with firm Performance when measured by Tobin s Q, however they report a negative relationship between capital structure with firms' performance when measured by ROA, and no significant relationship when measured by ROE as well as by EPS. Altogether, the study provides evidence which indicates firm performance is positively or even negatively related to capital structure. One important reason for this conflicting result can be the high cost of borrowing in developing countries like India. This study contributes to the empirical literature on the effect of capital structure on financial performance of Indian firms.
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.
