Effect Of Debt Financing On Financial Performance Of Listed Non-Financial Firms In Kenya

2020 ◽  
Vol 8 (7) ◽  
pp. 485-496
Author(s):  
Philip Njau Kibunja ◽  
Olanrewaju Isola Fatoki
Keyword(s):  
Financial Performance ◽  
Negative Relationship ◽  
Debt Financing ◽  
Medium Term ◽  
Short Term ◽  
Return On Equity ◽  
Financial Firms ◽  
Panel Data Regression ◽  
Study Results

This study sought to examine the effect of debt financing on the financial performance of non-financial firms listed on the Nairobi Securities Exchange in the five-year period 2013 to 2017. Using a sample of 23 listed non-financial firms data was collected from published financial statements of the sampled firms and analysed statistical using the panel data regression method. The independent variables were short-term, medium term and long-term debt while the explained variable was return on equity. Three control variables, firm size, sales growth and growth opportunities, were included and considered as having an effect on the relationship between the independent and dependent variables.  The study results observed that medium-term debt had a negative and statistical significant relationship with return on equity. Long-term debt had a positive but statistically insignificant relationship while short-term debt had a negative relationship with return on equity.

scholarly journals ANALISIS PENGARUH KEBIJAKAN HUTANG TERHADAP KINERJA KEUANGAN

2020 ◽  
Vol 9 (1) ◽  
pp. 35
Author(s):  
Ari Triadi Wijaya ◽  
Muhammad Ali Fikri
Keyword(s):  
Data Analysis ◽  
Financial Performance ◽  
Stock Exchange ◽  
Sampling Technique ◽  
Free Variable ◽  
Short Term ◽  
Return On Equity ◽  
Total Debt ◽  
Research Population

This study aims to determine the effect of debt policy on  financial performance of coal companies listed on the Indonesia Stock Exchange. Policy debt is proxied by short term debt (STD), long term debt (LTD), and total debt (TD), while financial performance is proxied by return on equity (ROE). This research carried out for 3 (three) years, namely 2015-2017. This research is a causal research with a quantitative approach, whereas based on the level of exploration of this study, including associative research. Population research is a coal company listed on the Indonesia Stock Exchange for the period 2015-2017. Samples obtained were based on purposive sampling technique, and obtained 21 company. Data analysis technique used panel data regression. Regression with using the free variable short term debt (STD), long term debt (LTD), and total debt (TD). Based on the results of data analysis, STD has no significant effect on ROE. Variable LTD has a significant effect on ROE. The TD variable has no significant effect with ROE. so the STD and LTD variables are able to influence the ROE variable explained by other factors outside this research model.

scholarly journals Capital Structure and The Profitability of Listed Retail Firms

2018 ◽  
Vol 10 (1(J)) ◽  
pp. 171-181
Author(s):  
Jason Stephen Kasozi
Keyword(s):  
Capital Structure ◽  
Negative Relationship ◽  
Order Theory ◽  
Debt Financing ◽  
Retail Sector ◽  
Short Term ◽  
Return On Assets ◽  
Pecking Order Theory ◽  
Policy Interventions

The South African retail sector continues to experience a decline in sales and returns amidst growing external competition and a drop in consumer confidence stemming from the recent credit downgrades in the country. Yet, firms in this sector appear to maintain high debt to equity levels. This study investigated whether the capital structure practices of these firms influence their profitability. A Panel data methodology, using three regression estimators, is applied to a balanced sample of 16 retail firms listed on the Johannesburg Securities Exchange (JSE) during the period 2008-2016. The analysis estimates functions relating capital structure composition with the return on assets (ROA). Results reveal a statistically significant but negative relationship between all measures of debt (short-term, long-term, total debt) with profitability, suggesting a possible inclination towards the pecking order theory of financing behaviour, for listed retail firms. Additionally, retail firms are highly leveraged yet over 75% of this debt is short-term in nature. Policy interventions need to investigate the current restrictions on long-term debt financing which offers longerterm and affordable financing, to boost returns. While this study’s methodology differs slightly from earlier studies, it incorporates vital aspects from these studies, and simultaneously specifies a possible model fit.  This helps to capture unique but salient characteristics like the transitional effects of debt financing on firm profitability.  It therefore delivers some unique findings on the financing behaviour of retail firms that both in form policy change, while stimulating further research on the phenomenon. 

scholarly journals Debt Financing and Firm Performance: Evidence from an Emerging South-Asian Country

2019 ◽  
Vol 10 (1) ◽  
pp. 40
Author(s):  
Mohammad Mazibar Rahman ◽  
Umme Khadija Kakuli ◽  
Shahnaz Parvin ◽  
Ayrin Sultana
Keyword(s):  
Firm Performance ◽  
Capital Structure ◽  
Financial Performance ◽  
Negative Influence ◽  
Short Term ◽  
Return On Assets ◽  
Return On Equity ◽  
Firm Financial Performance ◽  
Total Debt

This paper aims to empirically investigate the impact of capital structure choice on the firm performance of the firms listed under the Dhaka Stock Exchange of Bangladesh. Multiple regression has been employed in this research to determine the relationship between the capital structure and the firm’s financial performance. Three ratios of financial performance, i.e., return on assets, return on equity, and gross margin, have been used as a sample of non-financial Bangladeshi companies, selected from 2010 to 2015. The study records numerous findings. First, the result shows a significant negative influence of long-term debt (LTD) and total debt (TTD) on firm financial performance measured by return on assets (ROA), but no significant relationship is found between short-term debt (STD) and this measure of firm’s financial performance. Moreover, the research found that there is no significant effect of short-term debt, long-term debt and total debt on the firm financial performance measured by return on equity (ROE). Finally, the result shows that a significant negative influence of short-term debt and total debt on firm performance measured by GM, but no significant relationship was found between long-term debt and financial performance. In general terms, the results of this study may suggest that capital structure has a negative influence on firms’ financial performance in Bangladesh.

scholarly journals Capital Structure and The Profitability of Listed Retail Firms

2018 ◽  
Vol 10 (1) ◽  
pp. 171
Author(s):  
Jason Stephen Kasozi
Keyword(s):  
Capital Structure ◽  
Negative Relationship ◽  
Order Theory ◽  
Debt Financing ◽  
Retail Sector ◽  
Short Term ◽  
Return On Assets ◽  
Pecking Order Theory ◽  
Policy Interventions

The South African retail sector continues to experience a decline in sales and returns amidst growing external competition and a drop in consumer confidence stemming from the recent credit downgrades in the country. Yet, firms in this sector appear to maintain high debt to equity levels. This study investigated whether the capital structure practices of these firms influence their profitability. A Panel data methodology, using three regression estimators, is applied to a balanced sample of 16 retail firms listed on the Johannesburg Securities Exchange (JSE) during the period 2008-2016. The analysis estimates functions relating capital structure composition with the return on assets (ROA). Results reveal a statistically significant but negative relationship between all measures of debt (short-term, long-term, total debt) with profitability, suggesting a possible inclination towards the pecking order theory of financing behaviour, for listed retail firms. Additionally, retail firms are highly leveraged yet over 75% of this debt is short-term in nature. Policy interventions need to investigate the current restrictions on long-term debt financing which offers longerterm and affordable financing, to boost returns. While this study’s methodology differs slightly from earlier studies, it incorporates vital aspects from these studies, and simultaneously specifies a possible model fit.  This helps to capture unique but salient characteristics like the transitional effects of debt financing on firm profitability.  It therefore delivers some unique findings on the financing behaviour of retail firms that both in form policy change, while stimulating further research on the phenomenon. 

scholarly journals THE EFFECTS OF SHORT-TERM AND LONG-TERM ORIENTED MANAGERIAL BEHAVIOR ON MEDIUM-TERM FINANCIAL PERFORMANCE: LONGITUDINAL EVIDENCE FROM EUROPE

2013 ◽  
Vol 14 (2) ◽  
pp. 386-402 ◽  
Author(s):  
Matthias F. Brauer
Keyword(s):  
Financial Performance ◽  
Corporate Performance ◽  
Chief Executive ◽  
Well Being ◽  
Managerial Behavior ◽  
Medium Term ◽  
Short Term ◽  
Ceo Tenure ◽  
Term Performance

Short-term orientation aimed at maximizing quarterly results at the expense of long-term corporate performance and survival has become severely criticized. In the face of continuously decreasing chief executive officer (CEO) tenure, CEOs, however, seem to have few incentives to embrace long-term oriented behaviour. Instead, the question of foremost importance to self-interested CEOs is whether short-term orientation already harms financial performance in the three to four years of their own tenure, and whether CEOs stand a chance of benefiting from long-term orientation while still in office. CEOs thus face an intriguing ethical dilemma between optimizing their financial pay-off within their own tenure and securing the longer-term well-being of the corporation, its employees, and other major stakeholders. Consequently, our longitudinal study focuses on the medium-term performance implications of short-term and long-term orientation in Europe's largest publicly listed companies. Results indicate that short-term orientation negatively impacts on medium term performance while long-term oriented behavior is positively associated with corporate performance in the medium term. Our findings advance managerial myopia theory, and provide insights into one of the most central ethical dilemmas faced by corporate executives today.

scholarly journals The Effect of Capital Structure on Company Financial Performance

2020 ◽  
Vol 16 (2) ◽  
pp. 173-183
Author(s):  
Nini Nini ◽  
Dina Patrisia ◽  
Agus Nurofik
Keyword(s):  
Capital Structure ◽  
Financial Performance ◽  
Stock Exchange ◽  
Secondary Data ◽  
Manufacturing Companies ◽  
Short Term ◽  
Return On Equity ◽  
Book Value ◽  
Purposive Sampling

Abstract: This study aims to examine the effect of capital structure on the company's financial performance particularly in manufacturing companies listed on the Indonesia Stock Exchange for the 4 years period from 2014 to 2018. Capital structure is measured by Market Total Leverage (MTLEV), Market Long-Term Leverage (MLLEV) and Market Short-Term Leverage (MSLEV). On the other hand, the company's financial performance is measured by Return on Equity (ROE) and Price to Book Value (PBV). The populations in this study are manufacturing companies listed on the Indonesia Stock Exchange and the selection of samples was determined by purposive sampling method, with the final samples as many as 333 company-years. The type of data used is secondary data from IDX using multiple regression analysis methods. The results of the analysis show that the capital structure has negative and significant effect on the company's financial performance in each model.Keywords: capital structure, company financial performance Pengaruh Struktur Modal Terhadap Kinerja Keuangan PerusahaanAbstrak: Penelitian ini bertujuan untuk menguji pengaruh struktur modal terhadap kinerja keuangan perusahaan pada perusahaan manufaktur yang terdaftar di Bursa Efek Indonesia periode 2014-2018. Struktur modal diukur dengan Market Total Leverage (MTLEV), Market Long-Term Leverage (MLLEV) dan Market Short-Term Leverage (MSLEV). Sementara kinerja keuangan perusahaan diukur dengan Return on Equity (ROE) dan Price to Book Value (PBV). Populasi pada penelitian ini adalah perusahaan manufaktur yang terdaftar di Bursa Efek Indonesia. Sampel ditentukan dengan metode purposive sampling, kemudian sampel akhir diperoleh sebanyak 333 perusahaan-tahun. Jenis data yang digunakan adalah data sekunder dari IDX dengan menggunakan metode analisis regresi berganda. Hasil analisis menunjukan bahwa struktur modal berpengaruh negatif dan signifikan terhadap kinerja keuangan perusahaan disetiap model.Keywords: struktur modal, kinerja keuangan perusahaan 

scholarly journals The Relationship between Capital Structure and Financial Performance in the Companies Listed in Abu Dhabi Securities Exchange: Evidences from United Arab Emirates

2017 ◽  
Vol 9 (2) ◽  
pp. 1
Author(s):  
Anas Ali Al-Qudah
Keyword(s):  
Capital Structure ◽  
Financial Performance ◽  
United Arab Emirates ◽  
Negative Relationship ◽  
Abu Dhabi ◽  
Debt Ratio ◽  
Return On Equity ◽  
Study Results ◽  
The Relationship ◽  
The Capital Structure

This study aimed to examine the relationship between capital structure and financial performance in the firms listed in Abu Dhabi Securities Exchange (ADX), Profitability Ratios were used to express of the financial performance, and the Debt Ratio was used to express the Capital Structure. A random sample from the companies listed in ADX was taken to achieve the objective this study, it consisted of 48% of all companies in this financial market, and the study period extended from 2008 to 2015. The researcher used Statistical Package for the Social Sciences (SPSS), to analyze the study hypotheses, using ANOVA, model summery and coefficients for the study variables. And the results of this study showed that is positive relationship between the capital structure (Debt Ratio) and the Financial Performance (Profitability: Return on Assets) in ADX. And there is a negative relationship when we used the Return on Equity to express for the Profitability with the capital structure. The overall study results showed that there is significant relationship between capital structure and financial Performance in the companies listed in Abu Dhabi Securities Exchange, and the model of this study able to explanation almost 31% from changes happened in the profitability due to the capital structure. This result was consistent with some previous studies.

scholarly journals Debt Capital and Financial Performance: A Comparative Analysis of South African and Sri Lankan Listed Companies

2017 ◽  
Vol 9 (2) ◽  
pp. 103
Author(s):  
Dilriukshi Yapa Abeywardhana ◽  
Katlego Magoro
Keyword(s):  
South Africa ◽  
Sri Lanka ◽  
Financial Performance ◽  
South African ◽  
Negative Impact ◽  
Debt Financing ◽  
Retail Sector ◽  
Short Term ◽  
Debt Capital

This study compares how the debt capital of the listed companies operating in the wholesale and retail sectors of South Africa and Sri Lanka affect their financial performance. Objective of this study is to examine whether debt capital affects the financial performance of the wholesale and retail sector companies in South Africa and Sri Lanka. To examine the impact of debt financing on financial performance of companies over the 2011-2015 period. Fixed-effects (within) regression model was used.The findings the study confirms that debt financing, in terms of short-term debt and long-term debt, has a negative impact on the financial performance of wholesale and retail sector companies in the context of South Africa. In Sri Lanka, debt financing, in terms of short-term debt has a negative impact on firm performance, while long-term debt has a positive impact. This study gives special focus to identify in which industries do different components of the capital structure have significant impact or weak-to-no impact on firm performances.This suggests for the South African wholesale and retail sector can use equity capital and retained earnings efficiently, thereby minimizing conflicts of agency or agency costs and remaining independent of external financiers. In the case of Sri Lanka, the owners and managers of the retail companies should consider reducing the use of short-term debt and increase long-term debt capital as long-term debt seems to influence their financial performances positively.  

Financial Performance of ECIL, Hyderabad – An Analysis

2013 ◽  
Vol 3 (2) ◽  
Author(s):  
N. Jyothi ◽  
Dr. T. Satyanarayana Chary
Keyword(s):  
Public Sector ◽  
Performance Analysis ◽  
Private Sector ◽  
Financial Performance ◽  
Business Environment ◽  
Present Position ◽  
Short Term ◽  
Comprehensive Manner

Financial performance of individual organizations differ very significantly, however, the performance is distinguishable between public sector companies and private sector companies as their nature and size of investment and business environment is different . The ECIL is a very vast growing company which requires additional funds on a regular basis, whether internal or external. Particularly, the company needs both long term and short-term finances in view of its present position and enormous scope for improvement in the services provided. The present paper is a modest attempt to discuss the financial performance analysis of ECIL, Hyderabad in terms operating profits, capital employed ratios and turnover in a comprehensive manner over a period of 10 years.

scholarly journals Long-Term Data Traffic Forecasting for Network Dimensioning in LTE with Short Time Series

Electronics ◽  
2021 ◽  
Vol 10 (10) ◽  
pp. 1151
Author(s):  
Carolina Gijón ◽  
Matías Toril ◽  
Salvador Luna-Ramírez ◽  
María Luisa Marí-Altozano ◽  
José María Ruiz-Avilés
Keyword(s):  
Time Series ◽  
Deep Learning ◽  
Time Series Analysis ◽  
Data Traffic ◽  
Medium Term ◽  
Short Term ◽  
Traffic Forecasting ◽  
Series Analysis ◽  
Radio Planning

Network dimensioning is a critical task in current mobile networks, as any failure in this process leads to degraded user experience or unnecessary upgrades of network resources. For this purpose, radio planning tools often predict monthly busy-hour data traffic to detect capacity bottlenecks in advance. Supervised Learning (SL) arises as a promising solution to improve predictions obtained with legacy approaches. Previous works have shown that deep learning outperforms classical time series analysis when predicting data traffic in cellular networks in the short term (seconds/minutes) and medium term (hours/days) from long historical data series. However, long-term forecasting (several months horizon) performed in radio planning tools relies on short and noisy time series, thus requiring a separate analysis. In this work, we present the first study comparing SL and time series analysis approaches to predict monthly busy-hour data traffic on a cell basis in a live LTE network. To this end, an extensive dataset is collected, comprising data traffic per cell for a whole country during 30 months. The considered methods include Random Forest, different Neural Networks, Support Vector Regression, Seasonal Auto Regressive Integrated Moving Average and Additive Holt–Winters. Results show that SL models outperform time series approaches, while reducing data storage capacity requirements. More importantly, unlike in short-term and medium-term traffic forecasting, non-deep SL approaches are competitive with deep learning while being more computationally efficient.

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