Capital structure and corporate performance: a case of Nepal / Kabindra Pokharel 

Public ISBD Title : Capital structure and corporate performance: a case of Nepal Material Type: printed text Authors: Kabindra Pokharel, Author Publication Date: 2016 Pagination: 116P. Size: Books Accompanying material: 6/B Languages : English Descriptors: Capital structure Class number: 332.041 Abstract: During the last two decades the banking sector has experienced worldwide major transformations in its operating environment. Both external and domestic factors have affected its structure and performance. Recently banking institutions are facing the environment that is changing rapidly and competition is increasing at local as well as international level. As a result the risk in banking sector is increasing day by day. The choice of capital structure is crucial in the context of a bank. However, it is an essential element for the development of a healthy banking system in developing countries. The relationship between capital structure and performance are studied extensively in different period of time. In regards to the relationship between capital structure and profitability, different results are found. Some of the studies state that, there is a country where capital structure of banks affects positively to the profitability. Meanwhile, other studies indicate the nonlinear negative or positive relationship of capital structure and bank profitability. Profitability is the major reason behind the existence of any business and same thing applies in the banking sector also. Banks are also guided by the profit maximization principle. Banks always look for the ways to increase their financial performance and minimize the risk associated with that increased performance. Hence, for that different activities are taken into consideration. To maximize the performance and minimize the risk a set of activities such as increasing the size or total assets, decreasing loan, increasing deposits, liquidity and capital are taken under their consideration. This study on capital structure and bank performance has been undertaken for Nepalese banks because Nepalese banking sector has gone through broad changes and is emerging as a major sector of the economy. Thus, this study aims to analyze the effect of capital structure and some bank specific variables on performance of Nepalese banks. The results in the prior studies on capital structure and performance of banks are mixed and unclear. Hence, this study has been conducted to get clear idea of the capital structure and performance of Nepalese commercial banks. For this, the sample of 19 commercial banks with data of 7 years from 2008 to 2014 has been taken. Data has been collected from various secondary sources like annual reports of sample banks and consolidated financial reports prepared by Nepal Rastra Bank. Descriptive statistics, portfolio analysis, correlation analysis, and regressions have been carried out to examine the secondary data. The performance measures like return on assets (ROA), earnings per share (EPS) and net interest margin (NIM) of the banks have been used as the dependent variable. Capital structure variables like total debt to total assets ratio, long term debt to total assets ratio and short term debt to total assets ratio. The bank specific variables like size and credit risk have been considered as independent variables. Based on the results, total debt to total assets ratio, long term debt to total assets ratio and short term debt to total assets ratio in Nepal are important capital structure variable. Size and credit risk are bank specific variables in order of their relative importance that enhances the performance of the banks. To be more specific, total debt to total assets ratio, long term debt to total assets ratio and short term debt to total assets ratio are the independent variables that tend to influence the performance in negative manner. It implies that increase in any of these variables is likely to decrease the performance of the banks. However, independent variable size and credit risk has positive relation with performance. It reveals that bigger the company higher the performance in commercial banking industry. The recommendation put forward by this study is that banks are suggested to decrease the proportion of debt in capital mix to have better performance but peaking order theory and tradeoff theory of capital structure should be analyzed. On the other hand, credit risk has positive effect with performance. So, it is recommended to have certain level of credit risk to increase the bank performance. The size has positive relation with performance variable shows that bigger organization has better performance. The major limitation of this study is that this study has excluded some bank macroeconomic variables that might influence on performance evaluation of banks. The study remains enough ground for future researcher in the same topic. The future studies can be carried out by selecting other financial institutions like development banks, public banks and finance companies to grab the wider view of banks performance evaluation. Capital structure and corporate performance: a case of Nepal [printed text] / Kabindra Pokharel, Author . - 2016 . - 116P. ; Books + 6/B. Languages : English Descriptors: Capital structure Class number: 332.041 Abstract: During the last two decades the banking sector has experienced worldwide major transformations in its operating environment. Both external and domestic factors have affected its structure and performance. Recently banking institutions are facing the environment that is changing rapidly and competition is increasing at local as well as international level. As a result the risk in banking sector is increasing day by day. The choice of capital structure is crucial in the context of a bank. However, it is an essential element for the development of a healthy banking system in developing countries. The relationship between capital structure and performance are studied extensively in different period of time. In regards to the relationship between capital structure and profitability, different results are found. Some of the studies state that, there is a country where capital structure of banks affects positively to the profitability. Meanwhile, other studies indicate the nonlinear negative or positive relationship of capital structure and bank profitability. Profitability is the major reason behind the existence of any business and same thing applies in the banking sector also. Banks are also guided by the profit maximization principle. Banks always look for the ways to increase their financial performance and minimize the risk associated with that increased performance. Hence, for that different activities are taken into consideration. To maximize the performance and minimize the risk a set of activities such as increasing the size or total assets, decreasing loan, increasing deposits, liquidity and capital are taken under their consideration. This study on capital structure and bank performance has been undertaken for Nepalese banks because Nepalese banking sector has gone through broad changes and is emerging as a major sector of the economy. Thus, this study aims to analyze the effect of capital structure and some bank specific variables on performance of Nepalese banks. The results in the prior studies on capital structure and performance of banks are mixed and unclear. Hence, this study has been conducted to get clear idea of the capital structure and performance of Nepalese commercial banks. For this, the sample of 19 commercial banks with data of 7 years from 2008 to 2014 has been taken. Data has been collected from various secondary sources like annual reports of sample banks and consolidated financial reports prepared by Nepal Rastra Bank. Descriptive statistics, portfolio analysis, correlation analysis, and regressions have been carried out to examine the secondary data. The performance measures like return on assets (ROA), earnings per share (EPS) and net interest margin (NIM) of the banks have been used as the dependent variable. Capital structure variables like total debt to total assets ratio, long term debt to total assets ratio and short term debt to total assets ratio. The bank specific variables like size and credit risk have been considered as independent variables. Based on the results, total debt to total assets ratio, long term debt to total assets ratio and short term debt to total assets ratio in Nepal are important capital structure variable. Size and credit risk are bank specific variables in order of their relative importance that enhances the performance of the banks. To be more specific, total debt to total assets ratio, long term debt to total assets ratio and short term debt to total assets ratio are the independent variables that tend to influence the performance in negative manner. It implies that increase in any of these variables is likely to decrease the performance of the banks. However, independent variable size and credit risk has positive relation with performance. It reveals that bigger the company higher the performance in commercial banking industry. The recommendation put forward by this study is that banks are suggested to decrease the proportion of debt in capital mix to have better performance but peaking order theory and tradeoff theory of capital structure should be analyzed. On the other hand, credit risk has positive effect with performance. So, it is recommended to have certain level of credit risk to increase the bank performance. The size has positive relation with performance variable shows that bigger organization has better performance. The major limitation of this study is that this study has excluded some bank macroeconomic variables that might influence on performance evaluation of banks. The study remains enough ground for future researcher in the same topic. The future studies can be carried out by selecting other financial institutions like development banks, public banks and finance companies to grab the wider view of banks performance evaluation.

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Capital structure and firm performance: a comparative study of joint venture banks, private banks and public banks / Karna Bahadur Lama 

Public ISBD Title : Capital structure and firm performance: a comparative study of joint venture banks, private banks and public banks Material Type: printed text Authors: Karna Bahadur Lama, Author Publication Date: 2016 Pagination: 121p. Size: GRP/Thesis Accompanying material: 8/B Languages : English Descriptors: Capital structure Class number: 332.041 Abstract: One of the most important decisions from the financial managers in order to maintain the firm’s competitiveness is a decision regarding the capital structure. The capital structure of banking institutions has become an increasingly prominent issue in the world of finance, particularly in the wake of the 2008 banking collapse and financial restructuring efforts. Relationship between capital structure and firm performance is widely discussed and tested in the literature review. In spite of the numerous studies of this subject, the effect of capital structure on firm performance stills the most perplexing issues in corporate finance literature (Brounen and Eichholtz, 2001). Companies especially banks should have appropriate capital structure which is very important in the management of the firm. This is because the higher the debts in the capital structure of a firm, the greater the return on investment (Nwachukwu and Kingsley, 2016). Hence, capital structure is imperative for a firm’s survival and growth, as it plays a primary role in its financial performance in order to achieve its long-term goals and objectives. According to Diamond and Rajan (2000), the capital structure of banks is largely determined by the asset side of the statement of financial position. Titman and Wessels (1988) contended that firms with high profit levels, all things being equal, would maintain relatively lower debt levels since they can realize such funds from internal sources. Kester (1986) found a significantly negative relation between profitability and debt/asset ratio. Rajan and Zingales (1995) also confirmed a significantly negative correlation between profitability and leverage. Taub (1975) found significantly positive association between debt and profitability. Likewise, Abor (2005) found a significantly positive relationship between total debt and profitability. Similarly, Myers (2001) found that there is a positive relationship between capital-asset ratio and earnings of the bank. Salim and Yadav (2012) found that the short term debt ratio and long term debt ratio have negative impact on performance measured by ROE. In the context of Nepal, Baral (2004) found that the firm size and growth rate are positively related to leverage whereas the earning rate is negatively related to leverage. Gajurel (2005) found that Nepalese managers prefer internal financing first followed by bank loan financing. Likewise, Pradhan &Pokharel (2016) concluded that size and credit risk are the major factors affecting the financial performance of commercial banks. The major objective of this study is to assess the relationship between capital structure and firm performance of the Nepalese commercial banks. The study is based on secondary data of 17 commercial banks with 136 observations for the period of 2007/8 to 2014/15. The main source of data include various issues of Banking and Financial Statistics, Quarterly Economic Bulletin, Bank Supervision Report published by Nepal Rastra Bank and Annual Reports of selected commercial banks. The pooled cross sectional data analysis has been undertaken in the study. The research design adopted in this study is descriptive and causal comparative research design as it deals with the relationship between capital structure and firm performance of Nepalese commercial banks. The result shows that average return on equity is highest for NBB (36.56 percent) and lowest for NBL (-45.41percent). The average Tobin’s Q is highest for NABIL (0.954 times) and lowest for NBL (0.067 times). The average earning per share is highest for EBL (Rs. 89.96 per share) and lowest for MBL (Rs. 8.98 per share). The average short term debt ratio is highest for RBB (48.61 percent) and lowest for MBL (21.17 percent). The average long term debt ratio is highest for NBL (80.90 percent) and lowest for ADBL (58.25 percent). The average debt to equity ratio is highest for SBI (14.06 times) and lowest for NBL (-44.83 times). The average firm size is highest for RBB (Rs. 96.08 Billion) and lowest for NCCB (Rs. 18.06 Billion). The average assets tangibility is highest for MBL (3.25 percent) and lowest for SCB (0.23 percent). The average assets growth rate is highest for GBIME (49.50 percent) and lowest for NBL (9.34 percent). The descriptive statistics for joint venture bank shows that the average return on equity, Tobin’s Q, earnings per share, short term debt ratio, long term debt ratio, debt to equity ratio, firm size, assets tangibility and assets growth rate are 26.71 percent, 0.55 times, Rs. 62.74 per share, 32.88 percent, 74.44 percent, 10.96 times, 48.11 percent, 1.15 percent and 18.71 percent respectively. Similarly, the descriptive statistics for the private banks reveals that the average return on equity, Tobin’s Q, earnings per share, short term debt ratio, long term debt ratio, debt to equity ratio, firm size, assets tangibility and assets growth rate are 15.77 percent, 0.38 times, Rs. 20.56 per share, 23.35 percent, 72.61 percent, 10.06 times, 30.39 percent, 1.72 percent and 30.27 percent respectively. Similarly, the descriptive statistics for the private banks reveals that the average return on equity, Tobin’s Q, earnings per share, short term debt ratio, long term debt ratio, debt to equity ratio, firm size, assets tangibility and assets growth rate are -5.21 percent, 0.14 times, Rs. 58.10 per share, 41.32 percent, 72.65 percent, -10.83 times, 74.97 percent, 1.09 percent and 11.94 percent respectively. The study of joint venture banks shows that short term debt ratio is positively correlated to return on equity whereas long term debt ratio and assets tangibility are negatively related to return on equity and Tobin’s Q respectively. Similarly, the study of the private banks reveals that short term debt ratio and debt to equity ratio are positively related to earnings per share whereas the assets tangibility is negatively related to earnings per share. Likewise, the study of public banks reveals that short term debt ratio is positively related to return on equity whereas it is positively related to earnings per share. Likewise, firm size is also positively related to Tobin’s Q for public banks. The regression analysis reveals that the short term debt ratio has positive impact on bank performance for joint venture banks. This indicates that higher the short term debt ratio, higher would be the bank performance. Similarly, the short term debt ratio has positive impact on return on equity and earnings per share for private banks. The long term debt ratio has negative impact on return on equity which shows higher the long term debt ratio, higher would be the return on equity. Likewise, the total debt to equity ratio has positive impact on earnings per share for joint venture and private banks which indicates that an increase in total debt to equity ratio leads to increase in earnings per share. This result also shows that debt to equity ratio has positive impact on return on equity while it has negative impact on earnings per share for public banks. The bank size has positive impact on Tobin’s Q for public banks which indicates that higher the bank size, lower would be the Tobin’s Q. Likewise, the assets tangibility has negative impact on Tobin’s Q for joint venture banks which shows an increase in assets tangibility leads to decrease in Tobin’s Q. Capital structure and firm performance: a comparative study of joint venture banks, private banks and public banks [printed text] / Karna Bahadur Lama, Author . - 2016 . - 121p. ; GRP/Thesis + 8/B. Languages : English Descriptors: Capital structure Class number: 332.041 Abstract: One of the most important decisions from the financial managers in order to maintain the firm’s competitiveness is a decision regarding the capital structure. The capital structure of banking institutions has become an increasingly prominent issue in the world of finance, particularly in the wake of the 2008 banking collapse and financial restructuring efforts. Relationship between capital structure and firm performance is widely discussed and tested in the literature review. In spite of the numerous studies of this subject, the effect of capital structure on firm performance stills the most perplexing issues in corporate finance literature (Brounen and Eichholtz, 2001). Companies especially banks should have appropriate capital structure which is very important in the management of the firm. This is because the higher the debts in the capital structure of a firm, the greater the return on investment (Nwachukwu and Kingsley, 2016). Hence, capital structure is imperative for a firm’s survival and growth, as it plays a primary role in its financial performance in order to achieve its long-term goals and objectives. According to Diamond and Rajan (2000), the capital structure of banks is largely determined by the asset side of the statement of financial position. Titman and Wessels (1988) contended that firms with high profit levels, all things being equal, would maintain relatively lower debt levels since they can realize such funds from internal sources. Kester (1986) found a significantly negative relation between profitability and debt/asset ratio. Rajan and Zingales (1995) also confirmed a significantly negative correlation between profitability and leverage. Taub (1975) found significantly positive association between debt and profitability. Likewise, Abor (2005) found a significantly positive relationship between total debt and profitability. Similarly, Myers (2001) found that there is a positive relationship between capital-asset ratio and earnings of the bank. Salim and Yadav (2012) found that the short term debt ratio and long term debt ratio have negative impact on performance measured by ROE. In the context of Nepal, Baral (2004) found that the firm size and growth rate are positively related to leverage whereas the earning rate is negatively related to leverage. Gajurel (2005) found that Nepalese managers prefer internal financing first followed by bank loan financing. Likewise, Pradhan &Pokharel (2016) concluded that size and credit risk are the major factors affecting the financial performance of commercial banks. The major objective of this study is to assess the relationship between capital structure and firm performance of the Nepalese commercial banks. The study is based on secondary data of 17 commercial banks with 136 observations for the period of 2007/8 to 2014/15. The main source of data include various issues of Banking and Financial Statistics, Quarterly Economic Bulletin, Bank Supervision Report published by Nepal Rastra Bank and Annual Reports of selected commercial banks. The pooled cross sectional data analysis has been undertaken in the study. The research design adopted in this study is descriptive and causal comparative research design as it deals with the relationship between capital structure and firm performance of Nepalese commercial banks. The result shows that average return on equity is highest for NBB (36.56 percent) and lowest for NBL (-45.41percent). The average Tobin’s Q is highest for NABIL (0.954 times) and lowest for NBL (0.067 times). The average earning per share is highest for EBL (Rs. 89.96 per share) and lowest for MBL (Rs. 8.98 per share). The average short term debt ratio is highest for RBB (48.61 percent) and lowest for MBL (21.17 percent). The average long term debt ratio is highest for NBL (80.90 percent) and lowest for ADBL (58.25 percent). The average debt to equity ratio is highest for SBI (14.06 times) and lowest for NBL (-44.83 times). The average firm size is highest for RBB (Rs. 96.08 Billion) and lowest for NCCB (Rs. 18.06 Billion). The average assets tangibility is highest for MBL (3.25 percent) and lowest for SCB (0.23 percent). The average assets growth rate is highest for GBIME (49.50 percent) and lowest for NBL (9.34 percent). The descriptive statistics for joint venture bank shows that the average return on equity, Tobin’s Q, earnings per share, short term debt ratio, long term debt ratio, debt to equity ratio, firm size, assets tangibility and assets growth rate are 26.71 percent, 0.55 times, Rs. 62.74 per share, 32.88 percent, 74.44 percent, 10.96 times, 48.11 percent, 1.15 percent and 18.71 percent respectively. Similarly, the descriptive statistics for the private banks reveals that the average return on equity, Tobin’s Q, earnings per share, short term debt ratio, long term debt ratio, debt to equity ratio, firm size, assets tangibility and assets growth rate are 15.77 percent, 0.38 times, Rs. 20.56 per share, 23.35 percent, 72.61 percent, 10.06 times, 30.39 percent, 1.72 percent and 30.27 percent respectively. Similarly, the descriptive statistics for the private banks reveals that the average return on equity, Tobin’s Q, earnings per share, short term debt ratio, long term debt ratio, debt to equity ratio, firm size, assets tangibility and assets growth rate are -5.21 percent, 0.14 times, Rs. 58.10 per share, 41.32 percent, 72.65 percent, -10.83 times, 74.97 percent, 1.09 percent and 11.94 percent respectively. The study of joint venture banks shows that short term debt ratio is positively correlated to return on equity whereas long term debt ratio and assets tangibility are negatively related to return on equity and Tobin’s Q respectively. Similarly, the study of the private banks reveals that short term debt ratio and debt to equity ratio are positively related to earnings per share whereas the assets tangibility is negatively related to earnings per share. Likewise, the study of public banks reveals that short term debt ratio is positively related to return on equity whereas it is positively related to earnings per share. Likewise, firm size is also positively related to Tobin’s Q for public banks. The regression analysis reveals that the short term debt ratio has positive impact on bank performance for joint venture banks. This indicates that higher the short term debt ratio, higher would be the bank performance. Similarly, the short term debt ratio has positive impact on return on equity and earnings per share for private banks. The long term debt ratio has negative impact on return on equity which shows higher the long term debt ratio, higher would be the return on equity. Likewise, the total debt to equity ratio has positive impact on earnings per share for joint venture and private banks which indicates that an increase in total debt to equity ratio leads to increase in earnings per share. This result also shows that debt to equity ratio has positive impact on return on equity while it has negative impact on earnings per share for public banks. The bank size has positive impact on Tobin’s Q for public banks which indicates that higher the bank size, lower would be the Tobin’s Q. Likewise, the assets tangibility has negative impact on Tobin’s Q for joint venture banks which shows an increase in assets tangibility leads to decrease in Tobin’s Q.

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Impact of capital structure on cost of capital:comprehensive study of Nepalese commercial banks / Priyanka Poudel 

Public ISBD Title : Impact of capital structure on cost of capital:comprehensive study of Nepalese commercial banks Material Type: printed text Authors: Priyanka Poudel, Author Publication Date: 2017 Pagination: 110p. Size: GRP/Thesis Accompanying material: 8/B Languages : English Descriptors: Capital investments Class number: 332.041 Abstract: Financial decisions include long term financing and short term financial decisions. The long-term decisions are mode of capital sourcing and dividend decisions while the short-term financing decisions involve liquidity decisions. The financial managers have key responsibility of determining the optimal mix of debt and equity that will ensure maximization of shareholders (Maina & Kondongo, 2013).In other words, all the banks are forced to operate closer to the best practice or efficient production function. Increase in competition will result in greater risk-taking behavior due to the fact that market power of banks is reduced and their charter values are decreased. The determination of cost of capital plays more important role for the purpose of counterbalance the risk (Bas et al., 2009). The major objective of the study is to examine the impact of capital structure on cost of capital of Nepalese commercial banks. The study is based on secondary data of 18 commercial banks with 126 observations for the period of 2008/09 to 2014/15. The main source of data includes various issues of Banking and Financial Statistics, Quarterly Economic Bulletin, Bank Supervision Report published by Nepal Rastra Bank and Annual Reports of selected commercial banks. The pooled cross-sectional data analysis has been undertaken from the study.The research design adopted in this study is descriptive and causal comparative research design as it deals with the impact of capital structure variables on cost of capital of Nepalese commercial banks. The result shows that MBL has highest average cost of equity, KBL has the highest average cost of debt and KBL has the highest average WACC among the selected commercial banks throughout the study period.Similarly, the average long term debt ratio is highest for NCC (1.92 times), average short term debt ratio is highest for ADBL (0.11 times), average total debt ratio is highest for NCC (2.01 times), average debt to equity is highest for NCC (19.58 times), average firm size is highest for NIBL (Rs. 24.97 million) and average assets growth rate is highest for SBL(26.59 percent). The descriptive statistics for the selected Nepalese commercial banks reveals that the average cost of debt, cost of equity, weighted average cost of capital, long term debt ratio, short term debt ratio, total debt ratio, debt to equity, firm size is 3.38 percent, 6.52percent, 5.32 percent, 3.25 times,2.11 times, 1.33 times, 7.42 times, Rs.2.43 million and 1.43 percent respectively. The result reveals that weighted average cost of capital has positive correlation with short term debt ratio and assets growth rate. Similarly, weighted average cost of capital has negative correlation with long term debt ratio, total debt ratio, debt to equity and firm size. Cost of debt has positive correlation with assets growth rate. Likewise, cost of debt has negative correlation with short term debt ratio and long term debt on ratio. On the other hand, total debt ratio, debt to equity and firm size has negative correlation with cost of debt. Cost of equity has positive correlation with debt to equity, firm size and assets growth rate and however, long term debt ratio, short term debt ratio and total debt ratio are negatively correlated to cost of equity. The regression results show that weighted average cost of capital has negative relation with long term debt ratio, debt to equity and firm size whereas positive relation with short term debt ratio, total debt ratio and assets growth rate. Similarly, cost of debt has negative relation with short term debt ratio, debt to equity and total debt ratio and positive relation with total debt ratio, firm size and assets growth. Likewise, the result also reveals that cost of equity has negative relation with for short term debt ratio and total debt ratio whereas positive relation with long term debt ratio, firm size, assets growth rate and debt to equity. Impact of capital structure on cost of capital:comprehensive study of Nepalese commercial banks [printed text] / Priyanka Poudel, Author . - 2017 . - 110p. ; GRP/Thesis + 8/B. Languages : English Descriptors: Capital investments Class number: 332.041 Abstract: Financial decisions include long term financing and short term financial decisions. The long-term decisions are mode of capital sourcing and dividend decisions while the short-term financing decisions involve liquidity decisions. The financial managers have key responsibility of determining the optimal mix of debt and equity that will ensure maximization of shareholders (Maina & Kondongo, 2013).In other words, all the banks are forced to operate closer to the best practice or efficient production function. Increase in competition will result in greater risk-taking behavior due to the fact that market power of banks is reduced and their charter values are decreased. The determination of cost of capital plays more important role for the purpose of counterbalance the risk (Bas et al., 2009). The major objective of the study is to examine the impact of capital structure on cost of capital of Nepalese commercial banks. The study is based on secondary data of 18 commercial banks with 126 observations for the period of 2008/09 to 2014/15. The main source of data includes various issues of Banking and Financial Statistics, Quarterly Economic Bulletin, Bank Supervision Report published by Nepal Rastra Bank and Annual Reports of selected commercial banks. The pooled cross-sectional data analysis has been undertaken from the study.The research design adopted in this study is descriptive and causal comparative research design as it deals with the impact of capital structure variables on cost of capital of Nepalese commercial banks. The result shows that MBL has highest average cost of equity, KBL has the highest average cost of debt and KBL has the highest average WACC among the selected commercial banks throughout the study period.Similarly, the average long term debt ratio is highest for NCC (1.92 times), average short term debt ratio is highest for ADBL (0.11 times), average total debt ratio is highest for NCC (2.01 times), average debt to equity is highest for NCC (19.58 times), average firm size is highest for NIBL (Rs. 24.97 million) and average assets growth rate is highest for SBL(26.59 percent). The descriptive statistics for the selected Nepalese commercial banks reveals that the average cost of debt, cost of equity, weighted average cost of capital, long term debt ratio, short term debt ratio, total debt ratio, debt to equity, firm size is 3.38 percent, 6.52percent, 5.32 percent, 3.25 times,2.11 times, 1.33 times, 7.42 times, Rs.2.43 million and 1.43 percent respectively. The result reveals that weighted average cost of capital has positive correlation with short term debt ratio and assets growth rate. Similarly, weighted average cost of capital has negative correlation with long term debt ratio, total debt ratio, debt to equity and firm size. Cost of debt has positive correlation with assets growth rate. Likewise, cost of debt has negative correlation with short term debt ratio and long term debt on ratio. On the other hand, total debt ratio, debt to equity and firm size has negative correlation with cost of debt. Cost of equity has positive correlation with debt to equity, firm size and assets growth rate and however, long term debt ratio, short term debt ratio and total debt ratio are negatively correlated to cost of equity. The regression results show that weighted average cost of capital has negative relation with long term debt ratio, debt to equity and firm size whereas positive relation with short term debt ratio, total debt ratio and assets growth rate. Similarly, cost of debt has negative relation with short term debt ratio, debt to equity and total debt ratio and positive relation with total debt ratio, firm size and assets growth. Likewise, the result also reveals that cost of equity has negative relation with for short term debt ratio and total debt ratio whereas positive relation with long term debt ratio, firm size, assets growth rate and debt to equity.

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Impact of capital structure on financial performance of Nepalese insurance companies / Manisha Mahato 

Public ISBD Title : Impact of capital structure on financial performance of Nepalese insurance companies Material Type: printed text Authors: Manisha Mahato, Author Publication Date: 2018 Pagination: 100p. Size: GRP/Thesis Accompanying material: 11/B Languages : English Descriptors: Capital market Class number: 332.041 Abstract: Financial sector is the backbone of economy of a country. It works as a facilitator for achieving sustained economic growth through providing efficient monetary intermediation. A strong financial system promotes investment by financing productive business opportunities, mobilizing savings, efficiently allocating resources and makes easy the trade of goods and services. Several studies (McKinnon, 1973; Levine, 1997) have reported that the efficacy of a financial system to reduce information and transaction costs plays an important role in determining the rate of savings, investment decisions, technological innovations and hence the rate of economic growth. Insurance companies provide unique financial services to the growth and development of every economy. Such specialized financial services range from the underwriting of risks inherent in economic entities and the mobilization of large amount of funds through premiums for long term investments. The risk absorption role of insurers promotes financial stability in the financial markets and provides a sense of peace to economic entities. The insurance companies’ ability to cover risk in the economy hinges on their capacity to create profit or value for their shareholders. A well developed and evolved insurance industry is a boon for economic development as it provides long- term funds for development (Agiobenebo and Ezirim, 2002). This study examines the impact of capital structure on financial performance of Nepalese insurance companies. Return on assets and earnings per share are the dependent variables. The independent variables are total debt ratio, equity to total assets, leverage, firm size, liquidity ratio, assets tangibility and inflation. This study is based on secondary data of 14 Nepalese insurance companies 2007/08 to 2015/16, leading to a total of 126 observations. The data are collected from the annual report of selected insurance companies and annual report published by Rastriya Beema Samiti. The regression models are estimated to test the significance and impact of capital structure on financial performance of Nepalese insurance companies. The results show that there is a positive relationship of total debt ratio, equity to total assets, leverage, assets tangibility and inflation with return on assets. It indicates that increase in total debt ratio, equity to total assets, leverage, assets tangibility and inflation leads to increase in return on assets. However, firm size and liquidity have negative relationship with return on assets which indicates that increase in firm size and liquidity leads to decrease in return on assets. Similarly, the study reveals that equity to total assets, leverage, firm size and liquidity have positive relationship with earnings per share. It indicates that increase in equity to total assets, leverage, firm size and liquidity leads to increase in earnings per share. However, total debt ratio, assets tangibility and inflation are negatively related to earnings per share. It indicates that increase in total debt ratio, assets tangibility and inflation leads to decrease in earnings per share. The regression results also show that the beta coefficients are positive for total debt ratio, equity to total assets, leverage, assets tangibility and inflation with return on assets of Nepalese insurance companies. However, the beta coefficients are negative for firm size and liquidity. Yet, the beta coefficient is significant only equity to total assets at 5 percent level. Impact of capital structure on financial performance of Nepalese insurance companies [printed text] / Manisha Mahato, Author . - 2018 . - 100p. ; GRP/Thesis + 11/B. Languages : English Descriptors: Capital market Class number: 332.041 Abstract: Financial sector is the backbone of economy of a country. It works as a facilitator for achieving sustained economic growth through providing efficient monetary intermediation. A strong financial system promotes investment by financing productive business opportunities, mobilizing savings, efficiently allocating resources and makes easy the trade of goods and services. Several studies (McKinnon, 1973; Levine, 1997) have reported that the efficacy of a financial system to reduce information and transaction costs plays an important role in determining the rate of savings, investment decisions, technological innovations and hence the rate of economic growth. Insurance companies provide unique financial services to the growth and development of every economy. Such specialized financial services range from the underwriting of risks inherent in economic entities and the mobilization of large amount of funds through premiums for long term investments. The risk absorption role of insurers promotes financial stability in the financial markets and provides a sense of peace to economic entities. The insurance companies’ ability to cover risk in the economy hinges on their capacity to create profit or value for their shareholders. A well developed and evolved insurance industry is a boon for economic development as it provides long- term funds for development (Agiobenebo and Ezirim, 2002). This study examines the impact of capital structure on financial performance of Nepalese insurance companies. Return on assets and earnings per share are the dependent variables. The independent variables are total debt ratio, equity to total assets, leverage, firm size, liquidity ratio, assets tangibility and inflation. This study is based on secondary data of 14 Nepalese insurance companies 2007/08 to 2015/16, leading to a total of 126 observations. The data are collected from the annual report of selected insurance companies and annual report published by Rastriya Beema Samiti. The regression models are estimated to test the significance and impact of capital structure on financial performance of Nepalese insurance companies. The results show that there is a positive relationship of total debt ratio, equity to total assets, leverage, assets tangibility and inflation with return on assets. It indicates that increase in total debt ratio, equity to total assets, leverage, assets tangibility and inflation leads to increase in return on assets. However, firm size and liquidity have negative relationship with return on assets which indicates that increase in firm size and liquidity leads to decrease in return on assets. Similarly, the study reveals that equity to total assets, leverage, firm size and liquidity have positive relationship with earnings per share. It indicates that increase in equity to total assets, leverage, firm size and liquidity leads to increase in earnings per share. However, total debt ratio, assets tangibility and inflation are negatively related to earnings per share. It indicates that increase in total debt ratio, assets tangibility and inflation leads to decrease in earnings per share. The regression results also show that the beta coefficients are positive for total debt ratio, equity to total assets, leverage, assets tangibility and inflation with return on assets of Nepalese insurance companies. However, the beta coefficients are negative for firm size and liquidity. Yet, the beta coefficient is significant only equity to total assets at 5 percent level.

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Impact of capital structure on performance of commercial banks in Nepal / Sajana Shrestha 

Public ISBD Title : Impact of capital structure on performance of commercial banks in Nepal Material Type: printed text Authors: Sajana Shrestha, Author Pagination: 100p. Size: GRP/Thesis Accompanying material: 4/B General note: Including bibilography Languages : English Descriptors: Banks Banks and banking Capital Capital investments Capital market Commercial banks Corporations-Finance Investments Nepal Keywords: 'capital structure  capital market  investments  banks  banking' Class number: 332.041 Impact of capital structure on performance of commercial banks in Nepal [printed text] / Sajana Shrestha, Author . - [s.d.] . - 100p. ; GRP/Thesis + 4/B. Including bibilography Languages : English Descriptors: Banks Banks and banking Capital Capital investments Capital market Commercial banks Corporations-Finance Investments Nepal Keywords: 'capital structure  capital market  investments  banks  banking' Class number: 332.041

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