International Conference on Business and Information (ICBI)

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Subject: search.filters.subject.Capital Structure

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    Debt Capital and Financial Performance: A Study of South African Companies
    (Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2016) Magoro, K.M.R.; Abeywardhana, D.K.Y.
    The purpose of this study is to examine how debt capitals of the listed companies operating in the wholesale and retail sector of South Africa affect their financial performance. The study used a panel data sample of 25 South African wholesale and retail sector companies to examine the impact of debt capital on the financial performance of companies over the 2011-2015 period. Fixed-effects (within) regression model was used on the accounting-based-measures of profitability and financial performance. The study confirms that debt capital, in terms of short-term debt and long-term debt, has a negative impact on the financial performance of wholesale and retail sector companies of South Africa. The findings of this research will help South African wholesalers and retailers to understand the impact of debt capital on company performances. This study will help them make decisions that will ensure profit maximization and reduction of costs associated with debt, and ultimately, maximization of shareholders’ wealth. This study gives special focus to the wholesale and retail sector as it seeks to pioneer the addressing of root causes and reasons of research contradictions in this study area.
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    The Impact of External Environmental Conditions on Corporate Capital Structure: Evidence from Hotels and Travels Sector in Sri Lanka
    (Faculty of Commerce and Management Studies, University of Kelaniya, 2015) Perera, H.A.P.K.; Bandaranayake, S.
    In the modern financial era, companies adjust their capital structure to cope with the external and internal environmental conditions. The purpose of this study is to investigate the influence of external environment or in other words, institutional and macroeconomic conditions on capital structure decisions of firms listed under hotels and travels sector. The sample of the study comprised with 26 listed companies in hotels and travels sector of Colombo Stock Exchange over a period of 10 years from 2004 to 2013. The analysis is carried out by employing panel data econometric techniques. The empirical results demonstrate in overall institutional and macroeconomic conditions have significant influences on the capital structure decisions of firms listed in the hotels and travel sector. The findings of the study which is a featured departure from the previous studies which emphasize the role that prevailing institutional and macroeconomic conditions play in determining the capital structure decisions in the listed firms in Sri Lanka
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    Capital Structure and Firm’s Financial Performance: A Study of Sri Lankan Manufacturing Sector
    (Faculty of Commerce and Management Studies, University of Kelaniya, 2015) Hamidon, T.D.; Ranjani, R.P.C.
    This research paper attempts to investigate the impact of capital structure on firm’s financial performance based on the manufacturing companies listed in Colombo Stock Exchange (CSE). Annual data were collected from published financial statements relating to 20 sample companies selected using systematic sampling technique operating in manufacturing industry. Descriptive statistics, Correlation and Regression analyses were used as statistical tests to reveal the relationship and the association between the variables. Debt to Equity (DE) and Debt to Total Assets (DT) ratios were used as proxies for capital structure while Gross Profit Margin (GPM), Net Profit Margin (NPM), Return on Assets (ROA) and Return on Capital Employed (ROCE) were used as proxies for financial performance. The results confirm that only ROCE is positively and significantly related with both DE and DT while there is a negative correlation between GPM, NPM and ROA with DE and DT. In conclusion, capital structure is not a major determinant factor affecting the firm’s financial performance where it’s evident that there is no significant association between capital structure components and firm’s financial performance. The results are in support of some literature and are contradictory with some as well.