Purpose – The purpose of this study is to examine the relationship between debt level and performance among small and medium-sized enterprises (SMEs). Design/methodology/approach – Unlike the vast majority of previous research, this study uses three-stage least squares (3SLS) and fixed-effects models to analyse a comprehensive, cross-sectoral sample of 15,897 Swedish SMEs operating in five industry sectors during the 2009-2012 period. Findings – This study confirms that debt ratios, in terms of trade credit, short-term debt and long-term debt, negatively affect firm performance in terms of profitability. As a high debt ratio seems to increase the agency costs and the risk of losing control of the firm, SME owners and managers tend to finance their businesses with equity capital to a fairly high degree. Practical implications – As debt policy significantly influences firm performance, and thereby firm value and survival, SME owners and managers should focus on finding a satisfactory debt level. Originality...

Debt financing and firm performance: an empirical study based on Swedish data

The purpose of this paper is to examine the factors affecting profitability in Malaysian-listed companies. It has been argued that profitability is the main pillar for any company to survive in the long run. Although profitability is the primary goal of all business ventures, scant attention has been paid to the factors that affect profitability in developing countries. This study investigates the factors affecting profitability in Malaysian-listed companies.,This research is based on five independent variables that were empirically examined for their relationship with profitability. These variables are: firm size (as measured by total sales), working capital (WC), company efficiency (assets turnover ratio), liquidity (current ratio) and leverage (debt equity ratio and leverage ratio). Data of 120 companies listed on Bursa Malaysia covering the period from 2012 to 2014 were extracted from companies’ annual reports. Pooled ordinary least squares regression and fixed-effects were used to analyze the data.,The findings show a strong positive relationship between firm size (total sales), WC, company efficiency (assets turnover ratio) and profitability. The results also show a negative relationship between both debt equity ratio and leverage ratio and profitability. Liquidity (current ratio) has no significant relationship with profitability.,Due to the time limitation, the data includes only 120 companies listed in bursa Malaysia and covers the period from 2012 to 2014.,These results benefit internal users (such as mangers, shareholders and employees). They can realize the determinants of enhancing the profitability of their company after the depreciation of the Malaysian currency and therefore concentrate more on the factors that enhance their companies’ profitability. On the other side, other external users (such as investors, creditors, new established companies, tax authority) also may get advantages of these results. It is clear that those users concern about the profitability of companies and the determinants of their profitability after the currency’s depreciation.,This study differs than previous studies in many ways: first, it focuses on non-financial listed companies in Malaysia. Previous studies have concentrated on companies in the financial sector, such as banking and financial institutions or on industrial organizations. Second, this study analyzes the data in companies’ annual reports for a three-year period from 2012 to 2014. During this period, the economy in Malaysia was fluctuating due to currency depreciation. Third, the study used both return on equity and earnings per share as indicators of profitability. Fourth, the results of the study provide empirical evidence that large size firms with efficiently managed assets can improve operating income and ultimately enhance profitability. Last but not least, this study applies the resource-based theory and the trade-off theory.

Factors affecting profitability in Malaysia

This paper studies the impact of capital structure or financial leverage on firm financial performance. A sample size of 422 listed Indian manufacturing companies on Bombay Stock Exchange (BSE) has...

Capital Structure and Firm Performance: Empirical Evidence from India:

This paper mainly studies the influence of capital structure on firm’s performance This investigation has beenperformed on a sample of 36 Bangladeshi firms listed in Dhaka Stock Exchange during the period 2007–2012We have used four performance measures; earnings per share (EPS), return on equity (ROE), return of asset(ROA) and Tobin’s Q; as dependent variables and three capital structure ratios; short-term debt, long-term debtand total debt ratios; as independent variables Using pooling panel data regression method, we found that EPSis significantly positively related to short-term debt while significantly negatively related to long-term debtThere is significant negative relation between ROA and capital structure On the other hand, there is nostatistically significant relation exists between capital structure and firm’s performance as measured by ROE andTobin’s Q Nonetheless, aside from the positive relation between EPS and STDTA, we can conclude that capitalstructure has negative impact on firm’s performance which is consistent with the proposition of Pecking OrderTheory

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Influence of Capital Structure on Firm Performance: Evidence from Bangladesh

The capital structure decision plays an important role in the performance of a firm. Therefore, there have been many studies inspecting the rapport of capital structure with the performance of firms, although the findings of these studies are inconclusive. In addition, there is a relative deficiency of empirical studies examining the link between capital structure and the performance of banks in Bangladesh. This study attempts to fill this gap. Using the panel data of 22 banks for the period of 2005–2014, this study empirically examined the impacts of capital structure on the performance of Bangladeshi banks assessed by return on equity, return on assets and earnings per share. The results of the pooled ordinary least square analysis showed that capital structure inversely affects bank performance. The findings of this empirical study are of greater significance for the developing countries like Bangladesh because it calls for the concentration of the bank management and the policy makers to pursue the policies that reduce reliance on debt to achieve the optimal level of capital structure. The results of this study are also analysed in the light of earlier studies.

Impacts of Capital Structure on Performance of Banks in a Developing Economy: Evidence from Bangladesh

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Capital Structure and Firm Performance: Evidence from Malaysian Listed Companies

This study analyzes the impact of cash supply, dollar exchange rate, yuan exchange rate, Shanghai composite index (SSE composite index) on the IDX composite with transaction volume as a mediating variable (Case Study on Companies Listed on the Indonesia Stock Exchange in 2010 - 2020). The review was led utilizing 121 examples comprising of month to month information for all factors from 2010 to 2020. The information handling strategy utilized various straight relapse investigation procedures. The outcomes showed that to some extent cash supply, dollar exchange rate, SSE composite index had a critical constructive outcome on the IDX composite. To some degree, just the yuan exchange rate has no huge impact on the IDX composite. At the same time, cash supply, dollar exchange rate, yuan exchange rate and the SSE composite index simultaneously affected the IDX composite. The cash supply and the SSE composite index record have a critical constructive outcome on transaction volume. To some extent, exchange rate and yuan exchange rate have no critical impact on transaction volume. The cash supply, exchange rate, yuan exchange rate and SSE composite index simultaneously significantly affect on transaction volume. Simultaneously, cash supply, exchange rate, yuan exchange rate and SSE composite index significantly affect the IDX composite with exchange volume as an interceding variable.

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Analysis of Determinants of Stock Transaction Volume and its Effect on the IDX Composite in IDX 2010-2020 Period

The author conducted this research to comprehend and analyze the company's performance which will focus on the financial ratio, they are Total Asset Turnover Ratio (TATO), Debt to Equity Ratio (DER), Current Ratio (CR) which influenced by company value and the impact on Stock Returns (SR). The value of the company in this research is calculated using Price to Book Value (PBV). The research data is taken from companies active on the Indonesia Stock Exchange from 2017 to 2020, especially in the mining sector. This research uses a selected sample of 29 companies with panel data analysis method which is processed using the "Eviews 11" data processing program. The research results show that stock returns (SR) are not influenced by CR, but TATO, DER and PBV have a significant effect on stock returns (SR). TATO, DER, and CR together have a significant effect on SR and also on PBV. The impact on the dependent variable (SR) which is influenced indirectly by the independent variable (CR, DER TATO) is proven to be more dominant than the direct effect.

Mahfuzah Salim

Papers

Capital Structure and Firm Performance: Evidence from Malaysian Listed Companies

Analysis of Determinants of Stock Transaction Volume and its Effect on the IDX Composite in IDX 2010-2020 Period

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