Browsing by Author "Pathiraja, P.M.K.K."

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Capital structure effect on firm financial performance
(Department of Accountancy, University of Kelaniya, 2015) Pathiraja, P.M.K.K.
Capital structure is defined as combination of equity, debt or hybrid securities through which a company finances its assets. Firm’s leverage refers to the percentage of total debt in total financing. . Decision of Capital structure involve what type of source should be used either equity, or short or long term debt, or mix of sources of funding which better the firm’s financial performance. Initiating a business require purchasing assets in order to fulfill the purpose of organization. (Allen, 2011). An emerging consensus that comes out of the corporate governance literature (Smith, 2005) is that the interactions between capital structure and ownership structure impact on firm values. (Morck, 1988) Objective of this research is investigates the relationship between capital structure and firm financial performance as well as examine if more efficient firms choose more or less debt in their capital structure. This research methodology has gone some way in reconciling some of the empirical Irregularities reported in prior studies. Only report the results obtained from estimating dynamic models for both the efficiency and leverage equations. All data will collect by the secondary evidence by use the financial statement data. Result of this research is the effect of dispersed ownership is different across different capital structures. positive but insignificant for low leveraged firms and (significantly) negative for high leveraged firms. The latter finding is consistent with the view that the fear of bankruptcy induces managers of highly levered firms to lower debt.
Capital Structure Effectiveness on Financial Performance of Manufacturing Firms in Sri Lanka
(Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2016) Pathiraja, P.M.K.K.; Jayamaha, A.
Capital structure shows a significant role in financial decision making process in any business organization. Capital structure decision is more important because organizations need to maximize return and growth the value of the firm. Manager’s responsibility is a decide mix of debt capital and equity capital then it increase the value of the firm. Objective of this research is examine the impact of Capital Structure on financial Performance of manufacturing firms in Sri Lanka.by using 25 firms listed in Colombo stock exchange In this study data collect from secondary evidence through Annual Reports published by company which listed in Colombo stock exchange. There are four variables use for this study. Return on Asset (ROA) is a dependent variable and other explanatory variables are Debt to equity Ratio (DER), Long term Debt Ratio (LTDR) and Debt to Asset Ratio (DAR). Considering the relationship between the capital structure and financial performance. In debt to equity ratio has a negative relationship between Return on Asset and long term debt ratio has an insignificant negative relationship with ROA .and In Debt to Asset Ratio has a positive relationship between ROA. Relationship established between the capital structure and the financing structure is a part whole type relationship can be seen. It is recommended that firms should use more of equity than debt in financing their business activities. To get the better investment decision of mix of capital structure recommend to establish performance standards and those are properly communicate to the investors.