The Effect of Capital Structure on Financial Performance with Firm Size as a Moderating Variable of Non-Financial Firms Listed at the Nairobi Securities Exchange

Meshack, Kerongo Maatwa; Nyamute, Winnie; Okiro, Kennedy; Duncan, Elly

doi:10.19044/esj.2020.v16n22p139

Cited by 5 publications

(3 citation statements)

References 17 publications

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“…In this descriptive research whose target population comprised of all then eight companies that are listed under manufacturing and allied sector in Nairobi Security Exchange (NSE), it was found that retained earnings and equity have negative influence on profitability of firms studied. In another study by Meshack, Winnie, Okiro, and Ochieng (2022), the findings showed that capital structure had a positive statistically significant effect on profitability, hence the creation of the gap of study.…”

Section: Introductionmentioning

confidence: 93%

Retained Earnings and Profitability of Manufacturing Firms Listed at Nairobi Securities Exchange

MULEKANO,

MIROGA, PhD

2023

strategicjournals.com

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This study sought to assess the influence of retained earnings on profitability of manufacturing firms listed at the Nairobi Securities Exchange. The study was guided by the following specific objective: finding out the influence of retained earnings on profitability of manufacturing firms listed at the Nairobi Securities Exchange. The study was guided by Pecking Order Theory. The study adopted descriptive research design. The study targeted 8 listed manufacturing firms at the NSE. The sample size was 8 listed manufacturing firms listed at the Nairobi Securities Exchange. Secondary data was collected for duration of 5 years (January 2016 to December 2020) annually. Descriptive and inferential statistics were analyzed using STATA 15. Descriptive statistics entailed central tendency (means) and dispersion (standard deviation). Inferential statistics such as regression and correlation analyses were also used to determine both the nature and the strength of the relationship between the dependent and independent variables. Analyzed data was presented using tables and graphs. The findings revealed that, retained earnings have significant positive effect on profitability of manufacturing firms listed at the Nairobi Securities Exchange. This implied that increase in the utilization of retained earnings in the capital structure would results to significant increase in profitability. The study recommended that it would be prudent to recommend that manufacturing firms listed at the Nairobi Securities Exchange adopt the use of retained earnings as a source of finance in most of their operations as compared to other sources of funds so as to maintain the positive relationship between retained earnings and financial performance. The study further recommended that the manufacturing firms listed at the Nairobi Securities Exchange should embrace retained earnings as sources of finance for new projects in emerging markets.

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Section: Introductionmentioning

confidence: 93%

Retained Earnings and Profitability of Manufacturing Firms Listed at Nairobi Securities Exchange

MULEKANO,

MIROGA, PhD

2023

strategicjournals.com

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“…Further, although there are previous studies on IFR and firm value, the previous studies did not operationalize IFR into its six capitals (financial, manufactured, intellectual, human, social and environmental) which is the gap the current study sought to fill. Kerongo, Nyamute, Okiro and Duncan (2020) and Abbasi and Malik (2015) concluded that firm size has a moderating effect on value of listed firms at the NSE. This study also sought to confirm this assertion by investigate the moderating effect of firm size on the relationship between IFR and value of firms listed at the NSE.…”

Section: Introductionmentioning

confidence: 99%

Effect of Integrated Financial Reporting on the Value of Firms listed at the Nairobi Securities Exchange

Gathoni

2023

RJBF

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This study investigated the influence of IFR on the value of firms listed at the Nairobi Stock Exchange (NSE). The study used financial capital reporting, manufactured capital reporting, intellectual capital reporting, human capital reporting, social, and environmental capital reporting as independent variables, firm size as a moderating variable, and firm value and dependent variable. The study used both primary data and secondary data. The secondary data was obtained from individual firms’ annual financial reports and websites then captured in a data collection sheet. Data was obtained from a total of 64 firms listed at the NSE with data ranging from January 1, 2016, to December 31, 2020. Multiple linear regression model was used to test the combined effect on the dependent variable. The study found that there was a positive and significant relationship between financial capital reporting and the value of firms listed at the NSE; there was insignificant relationship between manufactured capital reporting and the value of firms listed at the NSE; intellectual capital reporting had a positive and significant effect on the value of firms listed at the NSE; there existed a positive and significant relationship between human capital reporting and value of firms listed at the NSE; environmental capital reporting had insignificant effect on the value of firms listed at the NSE; social capital reporting had insignificant effect on the value of firms listed at the NSE. The study further established that firm size had moderating effect on the relationship between integrated financial reporting and the value of companies listed at the NSE. The study concludes that integrated financial reporting has a positive relationship with the value of firms listed at the NSE. The study thus recommended that the management of firms listed at the NSE should strive to adopt the various integrated financial reporting in enhancing the value of their firms.

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“…If you choose an inappropriate capital structure, the company must bear the risks that will arise in the future [7]. Based on research Meshack et al [8] said that the capital structure affects financial performance. H2: Capital structure has a positive effect on company value Financial performance is an important indicator because it is used as a benchmark by investors to see the merits of a company or its financial position so that investors will consider more before investing their capital.…”

Section: Introductionmentioning

confidence: 99%

The Influence of Capital Structure on Company Value with Financial Performance as a Mediation Variable

Hidayah,

Ratri

2023

Proceedings of the 5th International Conference on Economics, Business and Economic Education Science, ICE-BEES 2022, 9-10 Augu

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This study determines the effect of capital structure on company value with financial performance as a mediating variable. The declining value of Gross Domestic Product (GDP) indicates that the economic condition is not significant enough. This is a result of the level of investment that is still weak. To be able to increase the value of GDP, the enthusiasm of industry players must remain high and companies must be more competitive to increase the value of their companies. The population of this study was manufacturing companies from various industrial sectors listed on the Indonesia Stock Exchange from 2017-2020 and the selection of the company used the purposive sampling technique. Data analysis used descriptive statistical analysis and the Structural Equation Model with the help of SmartPLS 3.0. The results of this study showed that capital structure did not affect company value but influential financial performance. The financial performance had a positive effect on company value and able to mediate between capital structure and company value. For further research to add other indicators so that investors have more considerations so that their investment decisions are right.

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The Effect of Capital Structure on Financial Performance with Firm Size as a Moderating Variable of Non-Financial Firms Listed at the Nairobi Securities Exchange

Cited by 5 publications

References 17 publications

Retained Earnings and Profitability of Manufacturing Firms Listed at Nairobi Securities Exchange

Retained Earnings and Profitability of Manufacturing Firms Listed at Nairobi Securities Exchange

Effect of Integrated Financial Reporting on the Value of Firms listed at the Nairobi Securities Exchange

The Influence of Capital Structure on Company Value with Financial Performance as a Mediation Variable

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