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Title: The Impact of Capital Structures on the Profitability of Zimbabwe Parks and Wildlife Management Authority
Authors: Nhongo, Eliah
Keywords: capital structure
corporate finance
Issue Date: May-2018
Publisher: Lupane State University
Abstract: The theory of capital structure and its relationship with a firm’s performance has been a topic of interest in corporate finance and accounting literature since the Modigliani and Miller theory (MM) (1958). Organizations have thus adopted numerous techniques of molding their capital structure such as issuing of shares, issuing of assets and debentures. In Zimbabwe, companies in the tourism sector such as ZPWM have been striving for growth since the multi-currency regime and this has led ZPWM adopting different methods of raising finance to support this growth such as internally generated (85%), donations (10%) and borrowings (5%). However, the profitability of ZPWM has been declining over the past years compared to the previous years since the adoption of different methods of raising capital and this has raised questions if capital expenditure has an impact on the profitability of ZPWM and that has thus necessitated this study to examine the impact on the profitability. The study has made use of secondary data collected on the ZPWM’s financial statements for a period of 4 years (2014-2017) and data was analyzed using the fixed effects of regression model through the use of EViews. The measure of performance used in this study were Return on Assets, Return on Investments and Return on Equity. Short term debt to total asset and long-term debt to total asset were also used in this study as capital structure measures. Regression results from the study revealed that long term debt and short-term debt to total asset had a positive impact on capital structure which was measured using ROA, ROI and ROE. It was concluded that capital structure has a positive impact on the profitability of ZPWM.
Appears in Collections:Department of Accounting and Finance

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