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Capital Structure and Its Impact on Profitability: With Special Reference to Listed Manufacturing and Service Companies in Sri Lanka

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dc.contributor.author Weerathunge, S.I.
dc.date.accessioned 2016-03-14T05:19:23Z
dc.date.available 2016-03-14T05:19:23Z
dc.date.issued 2015
dc.identifier.citation Weerathunge, S.I. 2015. Capital Structure and Its Impact on Profitability: With Special Reference to Listed Manufacturing and Service Companies in Sri Lanka. In Proceedings of the 4th Students’ Research Symposium, Department of Finance, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka. p 33. en_US
dc.identifier.uri http://repository.kln.ac.lk/handle/123456789/12153
dc.description.abstract This study investigates the relationship between capital structure and profitability of listed manufacturing and service sector companies in Sri Lanka. The study covers six years period from 2009 to 2014 and the sample size is five companies from service sector and twenty companies from manufacturing sector. The study uses return on assets (ROA) and return on equity (ROE) as performance variables. In addition debt equity ratio (DER) and debt assets ratio (DAR) are used as capital structure variables. The relationship between the performance and capital structure variables are analyzed using correlation coefficient and regression techniques. According to the results of this comparative study the relationship between capital structure and return on assets is not significant across all the observations carried out for both manufacturing and service sector except one observation in manufacturing sector. It also shows an insignificant relationship between profitability between debt assets ratio. However, there is a significant relationship in all observations between return on equity and debt to equity in both manufacturing and service sector. Moreover the study reveals that the nature of the industry also determines the effect of capital structure on their profitability. In manufacturing firms, there is a negative significant relationship between return on equity and debt equity ratio while service sector reveals a positive significant relationship between return on equity and debt equity ratio. en_US
dc.language.iso en en_US
dc.publisher Department of Finance, Faculty of Commerce and Management Studies, University of Kelaniya en_US
dc.subject Capital Structure en_US
dc.subject Profitability en_US
dc.subject Listed Manufacturing firms en_US
dc.subject Listed Service Firms en_US
dc.subject Debt Equity Ratio en_US
dc.subject Debt Assets Ratio en_US
dc.subject Return on Equity en_US
dc.subject Return on Assets en_US
dc.title Capital Structure and Its Impact on Profitability: With Special Reference to Listed Manufacturing and Service Companies in Sri Lanka en_US
dc.type Article en_US


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