The Effect of Capital Structure on Firms' Profitability

This book aims to investigate the effect of capital structure on firms’ profitability with special emphasis on Ethiopian large private manufacturing firms. This book contributes a piece of empirical evidence for a theory of capital structure in Ethiopian context. The decision regarding firm’s capital structure choice is an important issue for financial managers because it is very much influential on the firm’s profitability and value. In today’s dynamic business world for a sound operation the companies financial managers’ decision regarding capital structure should have to have a greater consideration on searching of its optimum level. In general the firm’s capital structure decision affects the two major objectives of financial management i.e. firm’s profit maximization and shareholders’ wealth maximization.