Browsing by Author "Firezer Legesse"

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    Impact of Capital Structure Determinant on Profitability of Insurance Company in Ethiopia
    (Addis Ababa University, 2018-06) Firezer Legesse; Abebe Yitayew
    Capital structure choice is one of the most important decisions faced by firm management. Thus,the major focus of this study was to investigate empirically firm specific factors such as, firm leverage, growth opportunities, size, tangibility and liquidity were impacts on performance in Ethiopian insurance industry. To achieve the research objectives panel analysis was used. In this study, the researcher used only secondary data. All insurance companies were included in the sample frame if they had Ten years annual report from 2007-2016 annual reports. The statistical tests were used includes: descriptive statistics, correlation, specific linear assumption and random effect regression estimation model, a relationship was established between firm specific factors and performance, measures return on asset (ROA) of the firms over a period of ten years. The results show that firm liquidity, Size, and asset tangibility were significant impact on performance of Ethiopian insurance companies, while firm growth and leverage have insignificant relation with ROA. From the findings the researcher recommended that the sample of Ethiopian insurance industry use more debt than equity in financing their business activities, if the value of business can be enhanced with debt capital, it is dangerous for the firm therefore they should decrease their debt level. Each Ethiopian insurance industry establishes with the aid of professional financial managers, that particular debt-equity mix that maximizes its value and minimizes its weighted average cost of capital.