Presentation 1
Presentation 1
Presentation 1
Different scholars in Ethiopia & other countries have different results: some
LTD SZ
ROE
G
R
ROA
STD
AT
Independent Dependent
Variable Variable
control variable
3. RESEARCH DESIGN AND METHODOLOGY
Study Area of the research is the import/export companies located at
Addis Ababa and around the city.
The secondary data are audited financial statement during the years
2015 to 2019
The study is examining the impact of long-term and short-term debt
The independent variables were STD & LTD as a proxy of capital structure
STD= Total short term debt LTD= Total long term debt
Total asset Total Asset
The control variables were
Size of the company SZ= log(total asset)
Growth of sales GR= current year sales-prior year sales
Current year sales
Asset tangibility AT=total fixed asset
total asset
Model specification
analysis
results
Variable Coefficient Std. Error t-Statistic Prob.
Model 1 C
STD
LTD
0.414448
-0.144534
-0.277346
0.212195
0.054144
0.098750
1.953147
-2.669441
-2.808551
0.0588
0.0114
0.0081
AT 0.151218 0.084085 1.798391 0.0807
SZ -0.021233 0.023334 -0.909935 0.3691
GR 0.044897 0.024906 1.802664 0.0801
Effects Specification
Cross-section fixed (dummy variables)
Weighted Statistics
R-squared 0.808381 Mean dependent var 0.333022
Adjusted R-squared 0.731733 S.D. dependent var 0.428277
S.E. of regression 0.203480 Sum squared residual 1.449147
F-statistic 10.54672 Durbin-Watson stat 2.088694
Prob(F-statistic) 0.000000
ROA
Adjusted R2 is 73.2% of explanatory variables express the dependent
variable
ROA = 0.414448 - 0.144534*STD - 0.27735*LTD + 0.151218*AT +
0.044897*GR from the model 1,
* STD & LTD are significant but negatively relate with ROA
* where as AT & GR have positive & significant relationship with
ROA
* if all explanatory variables goes to null imp/exp co.s’ return their
asset could be 0.4144
Dependent Variable: ROE
Method: Panel EGLS (Cross-section weights)
Regression
Date: 06/01/21 Time: 15:11
Sample: 2015 2019
Periods included: 5
Cross-sections included: 10
results
Variable Coefficient Std. Error t-Statistic Prob.
Model 2
C 3.090553 1.490851 2.073013 0.0456
STD -0.029404 0.061886 -0.475123 0.6377
LTD -0.381681 0.718623 -0.531129 0.5987
AT -0.329562 0.696666 -0.473055 0.6391
SZ -0.229904 0.156350 -1.470443 0.1504
GR 0.259181 0.141817 1.827577 0.0761
Effects Specification
Cross-section fixed (dummy variables)
Weighted Statistics
R-squared 0.792027 Mean dependent var 2.930434
Adjusted R-squared 0.708837 S.D. dependent var 5.761179
S.E. of regression 0.563929 Sum squared resid 11.13056
F-statistic 9.520769 Durbin-Watson stat 1.947030
Prob(F-statistic) 0.000000
ROE
ROE = 3.09055 + 0.25918*GR
from the regression model only growth of sales is positively
significant relationship with ROE.
* with no sales growth, imp/exp co. have a return on their
equity investment of 3.091
5. CONCLUSION AND RECOMMENDATION
Conclusion
The empirical test result shows that capital structure of STD and LTD has a
negative influence on the financial performance denoted by ROA of
sampled import/export companies in Ethiopia during the year 2015 to 2019.
ROE in this research has insignificant relationship with LTD or STD of
selected import/export companied in Ethiopia during the period of 2015 to
2019.
AT,SZ & Gr are positive & significant influence on ROA, but GZ is the only
explanatory variable positive & significant influence on ROE of sampled
import/export companies in Ethiopia during the year 2015 to 2019
RECOMMENDATION
The result from the study the import and export companies
should relay mainly on their internal investment source
which is equity than using either STD or LTD.
Import/Export companies increase their internal fund
source by selling stocks to the public
The Ethiopian government will announce the stock market
and its proclamation in Ethiopia
Thank you