Business, Management and Accounting
3 years ago

Profitability and growth drive debt ratios for Sri Lankan manufacturing firms

2 views
Journal of Management
Relationship between the determinants of capital structure and debt ratio: evidence from listed manufacturing companies in Sri Lanka
Athambawa Haleem

Paper Summary

The study looked at how different factors affect the debt ratio of manufacturing companies in Sri Lanka. They analyzed data from 26 companies over a five-year period. The results showed that profitability, growth, firm size, and non-debt tax shield have a significant impact on the debt ratio. However, tangibility did not show a significant effect. This means that a company's size, profitability, and growth play a big role in determining how much debt they take on.

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