Commerce and Management

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    Capital Structure and Profitability: An Empirical Analysis of SMEs in the UK
    (2015) Abeywardhana, D.K.Y.
    This study examines the relationship between capital structure and the profitability of non- financial SMEs in the UK for the period of 1998-2008. Using the Two Stage Least Squares, (2SLS) the results show a significant relationship with capital structure and profitability which is negatively related. The size of the firm appears a more important factor that determines the profitability in SMEs in the UK. There is consistent evidence for positive size- profitability relationship. The results of this study have shown that the capital structure of the firm has a significant influence on the profitability of SMEs in the UK. Especially, long-term debt to total assets ratio is negatively related with the profitability and this is an indication that SMEs are averse to use more equity because of the fear of losing the control.
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    Determinants of Cross-Company Differences in Capital Structures in Sri Lankan Hotel Industry: An Opinion Survey
    (2011) Fernando, C.S.P.; Rajini, P.A.D.; Reha, R.
    The capital structure is the composition of a company?s sources of funds, which is determined by the proportion of the debt-equity mix. Determination of capital structure of a firm is very important because it affects cost of capital. Firm?s capital structure is one of the most widely researched topics in corporate finance world. However, in the Sri Lankan context, only a few researches have been carried out on capital structure in service industry and hardly any in the hotel industry. Therefore, a need has been identified to find out the factors that determine capital structure of hotel industry. Hence, this research examines the effect of different company specific variables including liquidity, information asymmetry, agency cost, dividends, profitability, business risk, growth rate and bankruptcy costs on the capital structure of the Sri Lankan hotels. In achieving the aim of this research, an empirical investigation was conducted using survey questionnaires. In order to identify the overall explanatory power of variables, a multiple regression analysis was carried out and a simple linear regression was conducted to ascertain individual contributions of the determinants in explaining cross firm capital structure differences. The results revealed that the business risk variable is the only determinant that has a significant influence on proportion of debt in the capital structure.
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    The Effect of Profit Margin on Capital Structure: A Study of Listed Manufacturing Companies of Colombo Stock Exchange (CSE), Sri Lanka
    (2011) Yogendrarajah R; Thanabalasingam S
    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.