The Impact of Debt Structure on Financial Performance: Evidence from listed companies at Palestine Exchange

Authors

  • د. سامي نصر أبو شمالة
  • أ. زكية عبد الكريم الخضري
  • أ. ألفت هاشم الشاعر

Keywords:

Debt structure, financial structure, capital structure, financial performance, ROA.

Abstract

This study aims at identifying the impact of the debt structure on the financial performance of corporations. The study sample includes all the (41) listedfirms at  Palestine Exchange (PEX), except the banking sector. The study uses the descriptive statistics method and the model measurement through using multi-linear regression methods for the panel data. The study shows that using long-term debts to finance the firms’ assets in the sectors of investment, insurance, and industrial sector increases the return on assets (ROA), unlike the firms listed in the service sector which is has a negatively affected ROA by their dependency on long-term debt. The results also shows that account payable has a significant positive effect on ROA of the industrial sector’s firms only. Additionally, short-term debts has a significant positive impact on ROA for the listed firms in the investment and insurance sectors, where short-term lending and borrowing are one of its major financial and investment instruments. The study recommends that listed firms in the investment, insurance, and industrial sectors should rely on long-term debts in appropriate proportions to increase their revenues. 

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Published

2018-02-21

How to Cite

أبو شمالة د. س. ن., الخضري أ. ز. ع. ا., & الشاعر أ. أ. ه. (2018). The Impact of Debt Structure on Financial Performance: Evidence from listed companies at Palestine Exchange. Al-Quds Open University for Administrative & Economic Research & Studies, 2(8). Retrieved from https://journals.qou.edu/index.php/eqtsadia/article/view/1694

Issue

Vol. 2 No. 8 (2017): المجلد الثاني. ع(8) ربيع أول 1439هـ/كانون أول 2017م

Section

الأبحاث

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