Effect of Firm Age, Size, Tangibility and Profit leverage optimise Capital Structure in Oman Food Industry

Abilash KM¹

Section:Research Paper, Product Type: Journal-Paper
Vol.8 , Issue.4 , pp.69-74, Apr-2022

Online published on Apr 30, 2022

Copyright © Abilash KM . This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
 

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Abstract :
This study analyses with capital structure determinants of Oman food industry firm’s characteristics during the period of 2016-2020. This study will be assessing 14 companies which listed in Muscat Securities Market for the period of 5 years. Purpose sampling method has been used for this study. Financial leverage is considered as dependent variable and size, profit, tangibility and market to book ratio as independent variables. Obtained results shows leverage, size, and profit level is not good in food industry, whereas tangibility and market-to-book ratio value is good. Companies who have low profit and show positive correlation between leverage and tangibility should not borrow from market to avoid any intricacies in future. This study also exhibit that firm leverage has not have any relationship with financial performance of Oman food industry for selected sample period. Eventually, from this study researcher has observed that profit plays a vital role in firm development more than its size and tangibility to expand its business functions. It is recommended by this research that firm managers of Oman food industry should focus more on generating profit activities in operating functions among other determinants. This research can assist Oman food industry firm managers to initiate preventive action before implementation of any financing or operating decision in their domain. This study also emphasise with contemporary literature who experimented with capital determinants in different phase which enhance corporate managers thoughts to resist any challenges.

Key-Words / Index Term :
Capital Structure; Leverage; Size; Muscat Securities Market; Food industry

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