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

Kibunja, Philip Njau; Fatoki, Olanrewaju Isola

doi:10.14738/abr.87.8741

Cited by 3 publications

(3 citation statements)

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“…LTDR is found to have no significant impact on the financial performance of firms measured by ROA and ROE, as is shown in Models (3) and (6). These results align with the outcome of studies by Bayaraa [22], Appiah et al [28], Murugesu [31], Pradhan and Khadka [35], Taani [36], and Kibunja and Fatoki [37]. Firms and equity holders will benefit from an appropriate long-term financing structure.…”

Section: Regression Resultssupporting

confidence: 81%

The Impact of Capital Structure on Financial Performance of Agricultural Listed Companies in China Based on Multiple Linear Regression Model and Data Mining

Qiao

2023

AEDMR

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Background: With the transformation and upgrading of the economy, the market capitalization scale of agricultural listed companies has become larger and larger, but the problems caused by the unreasonableness of their capital structure have become increasingly prominent. This study aims at examining the relationship between capital structure and financial performance of agricultural listed companies in China. Methods: Secondary data are obtained from annual financial statements of the sampled firms over the period 2018-2022, and analyzed statistically using multiple regression models. The capital structure indicators refer to total debt ratio (TDR), short-term debt ratio (STDR), and long-term debt ratio (LTDR), and return on assets (ROA) and return on equity (ROE) are the performance proxies. Results: The results reveal that TDR and STDR have strong negative relationships with ROA and ROE, while LTDR has insignificant correlations with financial performance. Conclusion: The outcomes imply that agricultural companies should pay regular attention to the gearing ratio and strive to maintain good capital mix. They should depend less on short-term debt and could properly employ more of long-term debts in financing to improve profitability and promote sustainable development.

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Section: Regression Resultssupporting

confidence: 81%

The Impact of Capital Structure on Financial Performance of Agricultural Listed Companies in China Based on Multiple Linear Regression Model and Data Mining

Qiao

2023

AEDMR

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“…However, this article mentioned that in developing countries, such as Malaysia, firms which have unfavourable credit histories tend to be involved in debt financing. Debt financing assists in 7% to 9% returns in short-term financing (Kibunja and Fatoki, (2020)). On the other hand, companies with good financial records search for other options to maintain their financial flow.…”

Section: Debt Financingmentioning

confidence: 99%

Impact of Debt vs Equity Financing on the Indian Economy 2018-2023

Ghosh

2024

IJSREM

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This study focuses on analysing the differences and similarities between debt financing and equity financing systems in India. Hence, this gathered secondary sources of data on the involvement of the Indian economy in both debt and equity financing. It gathered data from a time limit of 2018 to 2023 to assess the current condition. This study found that both financing system is effective based on their individual advantages and disadvantages. Hence, this research process suggested that a company needs to choose such liquidity sources based on company needs and risk factors. Keywords: debt financing, equity financing, Indian economy, business, liquidity, loan

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“…In Kenya, state-owned corporations have increasingly turned to debt financing as a means to secure funding for their operations and expansion plans. According to recent reports, approximately 70% of state-owned corporations in the country rely on debt financing to meet their financial needs (Kibunja & Fatoki, 2020). This growing reliance on debt can be attributed to several factors.…”

Section: Introductionmentioning

confidence: 99%

Effect of Debt Financing on Financial Performance of Selected State Corporations in Kenya

MWAZITO,

MWANZIA, PhD

2023

strategicjournals.com

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There was a recent interest of state corporations borrowing funds to manage their operations. This begged the question why debt financing was being opted for running state corporations. It was in this regard that this study examined the effect of debt financing on financial performance of selected state corporations in Kenya. The study was guided by the following specific objectives: To determine the effect of bonds on financial performance of selected state corporations, to assess the effect of debentures on financial performance of selected state corporations, to assess the effect of bank loans on financial performance of selected state corporations and to evaluate the effect of factoring on financial performance of selected state corporations. To underpin the study findings, information asymmetry and transaction cost theory was used. The study adopted descriptive survey study design and it had a target 206 state-owned corporations out of which a sample of 136 was drawn from using Yamane's formulae. A structured questionnaire was used to collect information from finance and chief accountants of the selected state-owned corporations. Data analysis was done using SPSS version 26. The analysis indicated there is a strong positive relationship between debt financing and financial performance since. However, the study indicated that there is a medium positive relationship between bonds and financial performance. Further, the study showed that there was a very weak positive relationship between debentures and financial performance. It was clear that analysis indicated that there was a weak positive relationship between bank loans and financial performance. Lastly the study also showed that there was a very weak positive relationship between factoring and financial performance.

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

Cited by 3 publications

References 0 publications

The Impact of Capital Structure on Financial Performance of Agricultural Listed Companies in China Based on Multiple Linear Regression Model and Data Mining

The Impact of Capital Structure on Financial Performance of Agricultural Listed Companies in China Based on Multiple Linear Regression Model and Data Mining

Impact of Debt vs Equity Financing on the Indian Economy 2018-2023

Effect of Debt Financing on Financial Performance of Selected State Corporations in Kenya

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