The impact of capital structure on financial performance of insurance companies: empirical evidence from insurance companies in Ghana

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The purpose of this study was to investigate the firm’s capital structure decision and its impact on the profitability. A panel-data covering 2014 to 2018 audited financial statements of Insurances Companies under National Insurance Commission was used in the study. A sample of 24 insurance companies was used due to availability of financial statements for the period selected. The study revealed that, there was statistically significant negative relationship between capital structure and firms’ profitability. It was also evidenced that Return on equity, growth and assets quality are the key determinants of capital structure. Achieving an optimal capital structure was very challenging for the companies due to the dynamic nature of the determinants. The study, therefore, recommends that, the corporate leaders should always monitor the business environment. This would help them to understand the dynamics of debt and equity instruments, thereby choosing the right capital structure. When a firm plans to increase its return on equity, it should reduce its debt source of finance
A thesis submitted to the department of accounting and finance, Kwame Nkrumah university of science and technology in partial fulfillment of the requirement for the degree of msc. Accounting and finance