Capital Structure & Firm's Profitability: Petrochemical Sector of KSA

This study is exploratory that examines the impact of capital structure on the performance of 14 petrochemical firms listed in Tadawul during period 2011-2014. Previous researches were carried out mostly on firms operating in developed countries and only few studies were made on firms operating in countries characterized by having emerging or transitioning economies such as Saudi Arabia. Data needed for this research were collected from previous researches, companies' financial statements, questionnaires and interview. Simple linear regression was run to examine the relationship between capital structure and firm's financial performance. The capital structure is the independent variable measured by long-term debt to total asset and firm's performance is the dependent variable is measured by EPS, PM, ROA, ROE and PE ratio. Results have lacked consensus from previous researches and based on simple linear regression analysis the researcher concluded that most petrochemical firms have shown a strong negative relationship between LTD and PM and ROA. Major finding showed no relationship between LTD to total assets, EPS and PE-ratio.

Autorentext

Dalya Bahanshal, com um excelente GPA, obteve o seu diploma de BBA com especialização em finanças na Universidade AlYamamah, tendo participado em muitos fóruns internacionais e nacionais, tais como o Fórum da Juventude G200 e o Fórum de Investigação de Licenciatura. Atualmente, trabalha numa empresa privada e pretende preparar o CFA para melhorar a sua carreira na área das finanças.