The Relationship between Capital Structure and Firm Performance: Evidence from Jordan
Issue:
Volume 1, Issue 3, September 2013
Pages:
41-45
Received:
17 September 2013
Published:
20 October 2013
Abstract: The purpose of this study is to empirically investigate the relationship between capital structure and firm performance across different industries using a sample of Jordanian manufacturing firms in Jordan. The annual financial statements of 45 manufacturing companies listed on the Amman Stock Exchange were used for this study which covers a period of five (5) years from 2005-2009. Multiple regression analysis was applied on performance indicators such as Return on Asset (ROA) and Profit Margin (PM) as well as Short-term debt to Total assets (STDTA), Long term debt to Total assets (LTDTA) and Total debt to Equity (TDE) as capital structure variables. The results show that there is a negative and insignificant relationship between STDTA and LTDTA, and ROA and PM; while TDE is positively related with ROA and negatively related with PM. STDTA is significant using ROA while LTDTA is significant using PM. The study concludes that statistically, capital structure is not a major determinant of firm performance. It recommends that managers of manufacturing companies should exercise caution while choosing the amount of debt to use in their capital structure as it affects their performance negatively.
Abstract: The purpose of this study is to empirically investigate the relationship between capital structure and firm performance across different industries using a sample of Jordanian manufacturing firms in Jordan. The annual financial statements of 45 manufacturing companies listed on the Amman Stock Exchange were used for this study which covers a period...
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The Impact of Privatization on Financial Performance of State – Owned Enterprises: A Case Study of the Jordanian Cement Factories Company
Issue:
Volume 1, Issue 3, September 2013
Pages:
46-54
Received:
15 August 2013
Published:
30 October 2013
Abstract: This study aimed at investigating the potential impact of privatization on the financial and operating performance of the Jordanian Cement Factories Company (JCFC) as an attempt to contribute to the debate on how the privatization of public enterprises may affect the financial and operational performance of these enterprises. The data were obtained from the annual reports of JCFC for five years before and five years after privatization. Performance criteria were calculated and compared to determine whether there are significant differences among them in the pre- and post-privatization periods. Related statistics of JCFC share performance were further compared with the market and industry indicators. The findings revealed that while privatization did not seriously affect JCFC's operating performance and profit, it led to liquidity improvement, debt reduction, improved investments, and a decline in overstaffing.
Abstract: This study aimed at investigating the potential impact of privatization on the financial and operating performance of the Jordanian Cement Factories Company (JCFC) as an attempt to contribute to the debate on how the privatization of public enterprises may affect the financial and operational performance of these enterprises. The data were obtained...
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