International Journal of Business and Management Review (IJBMR)

EA Journals

Capital Structure

Covid-19 Pandemic and Capital Structure: Evidence from West Africa (Published)

The question of whether the Covid-19 pandemic is a predictor of firms’ capital structure has remained unanswered following limited empirical studies. The financial structure of every business is its lifeblood which is the most important decision-making at any stage of the business’s operation. This study investigated the effect of covid-19 on the capital structure of non-financial firms listed on the Ghana stock exchange (GSE). The study focused on long-term debt, short-term debt and total debt ratios as a measure of capital structure. The study adopted the ex-post facto research design, the population consisted of 23 listed non-financial firms out of which 21 were sampled. Data was sourced from audited annual financial reports of the selected companies. Panel regression and ANOVA were used to analyze the data. The findings of the study revealed that covid-19 pandemic showed an insignificant effect on capital structure measured as long-term debt. This implies that the pandemic did not cause significant volatility to the long-term debt of non-financial firms in Ghana within the period of the study. Furthermore, the covid-19 pandemic showed no significant effect on short-term debt. This indicates that short-term borrowings for non-financial firms listed on GSE were not significantly affected by the covid-19 pandemic. The findings of the study further revealed that the covid-19 pandemic does not have a significant effect on the total debt of listed non-financial companies in Ghana. The study recommends that the capital structure policy of non-financial firms listed on the Ghana Stock Exchange should be maintained. This is because the study revealed that the severity of the covid-19 pandemic on business operations did not significantly affect the capital structure of the firms as measured by long-term debt, short-term and total debt.

Keywords: COVID-19, Capital Structure, Ghana, West Africa, pandemic

Capital Structure and Financial Performance of Quoted Manufacturing Firms in Nigeria (Published)

There is a divide of view on the relationship between capital structure and corporate financial performance. This study explored the effects of capital structure on financial performance of quoted manufacturing firms in Nigeria. The study used panel least square multiple regression to examine secondary data gathered from the 14 sampled organizations’ financial statements from 2011 to 2020. The null hypothesis that there is no statistically significant link between total-debt-to-total-equity and return on assets of manufacturing entities in Nigeria was accepted. The study rejected the second hypothesis relating to long-term-debt -to-total-assets. The study recommended that management of manufacturing corporations that are active on the stock market should strive to increase their long-term-debt-to-total-assets so as to improve their business operations and by extension, their financial performance. The study established that there is a beneficial link between capital structure and financial performance of manufacturing companies.

Citation: Akinrinola, O.O.,   Tomori, O.G.,   Audu, S.I.  (2023) Capital Structure and Financial Performance of Quoted Manufacturing Firms in Nigeria, International Journal of Business and Management Review, Vol.11, No. 2, pp.29-47

Keywords: Capital Structure, Financial Performance, Manufacturing Firms, Return on Assets

Capital Structure Impact on Financial Performance of Sharia and Non-Sharia Complaint Companies of Pakistan Stock Exchange (Published)

For a firm to be profitable, it is necessary to create an optimal capital structure that contribute towards desired performance level. This study was conducted to explore the relationship between capital structure and financial performance of firms specifically with respect to shariah complaint and non shariah complaint companies. The analysis was conducted on panel data of 8 companies (3 shariah complaint and 5 non shariah complaint) listed under technology and communication sector of Pakistan Stock Exchange under the period 2009-2015.  Financial Performance was the dependent variable measured by ROA and ROE while capital structure was independent variable measured by indicators, LTDR, STDR, SGR, NDTS and INSHOL. Multiple linear regression and correlation were used as statistical tools to run the model. On the basis key findings we concluded in Pakistan Shariah and non shariah companies have different pattrens of capital structure. We further concluded that capital structure effect the performance of firm in case of non-shariah but do not significantly affect performance of shariah complaint.

Keywords: Capital Structure, Financial Performance, Non- Sharia complaint, Pakistan, Return on Asset, Return on Equity, Sharia complaint, Technology and Communication

Speed of Adjustment towards the Leverage Target Plantation Companies in Indonesia (Published)

The aim of this paper is to analyze the speed of adjustment towards the leverage target of plantation companies especially oil palm in Indonesia. The data which were used in this paper covered the years of 2009 – 2013. The used sample of the plantation companies was listed on the Indonesia Stock Exchange (IDX) and the analysis was based on the partial adjustment model. The results showed the plantation company’s internal characteristics in which the financing deficit and market capitalization affected the speed of adjustment, whereas macroeconomic condition relatively did not affect at all. This was due to the long-term investment of oil palm plantation. Although macroeconomic factors in this paper relatively did not affect the speed of adjustment of the capital structure of the oil palm plantation companies, the government must keep macroeconomic in a good condition to support the business. If an economic crisis happens, it will adversely affect the palm oil business and the financial aspect will affect the condition of the company’s capital structure to make adjustments to the target.

Keywords: Capital Structure, Oil Palm Plantation Companies, Partial Adjustment Model, Speed of Adjustment.

Stimulants of Profitability of Non-Bank Financial Institutions: Evidence from Bangladesh (Published)

Financial institutions both Bank and Non-Bank play a significant role in the economy of a country. Like other developing countries Beside the Banking industry necessarily of Non-Bank financial institutions cannot overlook in Bangladesh. This study inspects the profitability of firms in the Non-Banking Financial Institutions (NBFIs) diligence of Bangladesh. Financial Enactment of a financial organization fundamentally depends on its some key financial factors. Specially operating efficiency is main inducing factor which is designed through operating income. Besides it capital Structure combination of equity and liability, term deposit, total asset considerably affect the profitability of any NBFI company. In addition operating expense also upsets the profitability though that is not statistically significant. Different Statistical procedures such as correlation matrix, multiple regressions have been used to determine the associations between variables. And before doing regression analysis normality distribution test has been accomplished by One-Sample Kolmogorov- Smirnov Test. This research is an effort to find out the statistically significant key stimulants variable and their level of impact over net profit.

Keywords: Capital Structure, Financial Performance, Non-Bank Financial Institutions (NBFI), Operating efficiencies, Profitability

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