Impact of capital structure on profitability of Nepalese manufacturing companies

Abstract

The objectives of research are to assess the current status of total debt to total assets, total debt to equity ratio, leverage, liquidity, assets tangibility, size, return on assets and return on equity of Nepalese manufacturing companies, to examine the relationship of total debt to total assets, total debt to equity ratio, leverage, liquidity, assets tangibility and size to the return on assets and return on equity of Nepalese manufacturing companies and to analyze the total debt to total assets, total debt to equity ratio, leverage, liquidity, assets tangibility and size impact to the return on assets and return on equity of Nepalese manufacturing companies. Descriptive and casual comparative research design has been employed. The descriptive statistics, correlation and regression analysis are conducted. The achievement of the objectives. The data are collected from annual report of the manufacturing companies. Sample are selected four sample manufacturing and secondary data of each 10 years from 2014-2023. The finding of the study is that the different between minimum and maximum is higher, maximum and mean also higher, minimum and mean also higher. Other hand the standard deviation is higher. These means the data flow of all the variables; return on assets, return on equity, total debt to total assets, debt equity ratio, leverage, liquidity, assets tangibility and size are in the nature of fluctuating. The relationship of total debt to total assets, debt equity ratio, and leverage, liquidity and assets tangibility to the return on assets is significant. The relationship of size and return on asset is not significant. The relationship of assets tangibility is significant to the return on equity. The relationship of total debt to total assets, debt equity ratio, leverage, liquidity and size is not significant to the return on equity. The impact of total debt to total assets, debt equity ratio, leverage and liquidity to the return on assets is significant. The impact of assets tangibility and size are not significant to the return on assets. The impact of total debt to total assets, debt equity ratio, leverage and liquidity to the return on equity is significant. The impact of assets tangibility and size are not significant to the return on equity