Firm probability: Does Capital Structure have influence on Firm Profitability?

Abstract

The purpose of this study was to examine the impact of capital structure on company profitability using a representative sample of 162 businesses. Researchers in the Kurdistan area of Iraq took a quantitative approach to assessing the role that capital structure (corporate governance, ownership structure, and constructive thought patterns) plays in ensuring that local businesses maintain a competitive edge over their rivals. The study's sample was drawn at random, and it was conducted in a number of different areas across the Kurdistan region of Iraq. Out of 175 surveys distributed, only 162 were returned with complete responses. Based on the findings, the strongest correlation was found between corporate governance and business profitability, whereas the worst correlation was found between ownership and firm profitability. As a consequence of our analyses, we conclude that debt should be used only as a last resort by financial managers. More controlled variables, larger samples, and longer time period data might all be added to the regression models used in this study to improve the quality of our findings. There is flexibility in the choice of metrics and approach.