Department of Accounting and Finance
URI for this collectionhttps://rps.wku.edu.et/handle/123456789/46627
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Item DETERMINANTS OF CAPITAL STRUCTURE: EVIDENCE FROM MANUFACTURING FIRMS IN ETHIOPIA(wolkite university, 2022-06-07) JIMMAWORK G/MESKELThe overall objective of the study was to investigate determinant factors affecting the capital structure of manufacturing firms in Ethiopia. The study employed explanatory research design and quantitative research approach. Secondary data were collected from 81 manufacturing firms’ financial statement (2015 to 2020) to achieve the objective of the study. The study was targeted on manufacturing firms in Ethiopia. However, for the accessibility of data the author specifically focused on large tax paying manufacturing firms and simple random sampling technique was used to select sample of 81 large tax paying manufacturing firms among the total population of 102. Finally, after collecting the relevant data, descriptive statistics, correlation analysis and OLS model were used to analyze the data. The study found that profitability, firm size, firm growth, liquidity and volatility in foreign exchange are found very important in determining the variation in capital structure of manufacturing firms in Ethiopia during the study period under consideration. Specifically, from the firm specific factors; firm growth, asset tangibility, and firm size were found positively affecting the capital structure in the manufacturing industry during the study period while profitability and liquidity found negatively influencing capital structure. In other side among the macro economic variables, volatility in foreign exchange were found positively affecting the capital structure. The researcher recommends that it is better to manufacturing firms to increase debt capacity in proportion to tangible asset because the tangible asset is used as collateral and provides security to lender in occurrence of financial stress. Furthermore, the researcher recommends that it is advisable to take in to account the suggestions of pecking order theory and static trade of theory since these theories are more pertinent to the capital structure decision of Ethiopian manufacturing firms.Item THE EFFECT OF CAPITAL STRUCTURE ON PROFITABILITY: EVIDENCE FROM MANUFACTURING COMPANIES IN ADDIS ABABA, ETHIOPIA(wolkite university, 2023-08-07) KENZU HUSSENThis research study is undertaken to investigate the effect of capital structure on profitability of manufacturing company in Addis Ababa, Ethiopia. The study examines the manufacturing specific and macro-economic factors that affect profitability of manufacturing company of Addis Ababa, Ethiopian. The data covered the period from 2010-2021 GC for the sample of selected seventeen manufacturing company. Quantitative research approach and explanatory design are adopted in carrying out this research. Secondary data is collect from the ERCA and NBE annual report by using purposive sampling technique. The random effect regression technique is used by econometric display EViews9 and Stata. The findings of the study shows that, Solvency and Debt to equity ratio(DER) have positive and statically significant effect on ROE and firm value and liquidity have negative and significant effect on ROE. When we come to ROA, solvency and Debt to asset ratio(DAR)have significant and positive effect on ROA and firm value, liquidity and DER have negative and statically significant effect on ROA. The remaining variables like are not significant. The researcher recommends, manufacturing company who has the axes of market demand, should mainly focus on the efficiently used the available resource to improve profitability of manufacturing company in Addis Ababa Ethiopia