Processing, Please wait...

  • Home
  • About Us
  • 📺 Tutorial
  • Search:
  • Advanced Search

Growing Science » Accounting » Leverage, capital and profitability of the banks: Evidence from Saudi Arabia

📚 Highly Cited Articles

  • Jaya Algorithm
  • Rao Algorithm
  • TLBO Algorithm
  • Discrete Firefly
  • ChatGPT and Blended Learning

Journals

  • IJIEC (777)
  • MSL (2648)
  • DSL (690)
  • CCL (544)
  • USCM (1099)
  • ESM (428)
  • AC (562)
  • JPM (323)
  • IJDS (992)
  • JFS (101)
  • HE (37)
  • SCI (41)

AC Volumes

    • Volume 12 (10)
      • Issue 1 (5)
      • Issue 2 (5)
    • Volume 11 (20)
      • Issue 1 (5)
      • Issue 2 (5)
      • Issue 3 (5)
      • Issue 4 (5)
    • Volume 10 (20)
      • Issue 1 (5)
      • Issue 2 (5)
      • Issue 3 (5)
      • Issue 4 (5)
    • Volume 9 (21)
      • Issue 1 (5)
      • Issue 2 (6)
      • Issue 3 (5)
      • Issue 4 (5)
    • Volume 8 (46)
      • Issue 1 (10)
      • Issue 2 (15)
      • Issue 3 (14)
      • Issue 4 (7)
    • Volume 7 (205)
      • Issue 1 (29)
      • Issue 2 (27)
      • Issue 3 (25)
      • Issue 4 (30)
      • Issue 5 (26)
      • Issue 6 (32)
      • Issue 7 (36)
    • Volume 6 (154)
      • Issue 1 (5)
      • Issue 2 (16)
      • Issue 3 (18)
      • Issue 4 (25)
      • Issue 5 (30)
      • Issue 6 (30)
      • Issue 7 (30)
    • Volume 5 (17)
      • Issue 1 (4)
      • Issue 2 (4)
      • Issue 3 (4)
      • Issue 4 (5)
    • Volume 4 (17)
      • Issue 1 (5)
      • Issue 2 (4)
      • Issue 3 (4)
      • Issue 4 (4)
    • Volume 3 (22)
      • Issue 1 (7)
      • Issue 2 (6)
      • Issue 3 (4)
      • Issue 4 (5)
    • Volume 2 (21)
      • Issue 1 (5)
      • Issue 2 (6)
      • Issue 3 (5)
      • Issue 4 (5)
    • Volume 1 (9)
      • Issue 1 (5)
      • Issue 2 (4)

🔑 Keywords

Supply chain management(168)
Jordan(167)
Vietnam(153)
Customer satisfaction(122)
Performance(116)
Supply chain(113)
Competitive advantage(98)
Service quality(98)
Artificial intelligence(95)
Tehran Stock Exchange(94)
Sustainability(91)
SMEs(91)
optimization(88)
Trust(84)
Financial performance(84)
TOPSIS(83)
Job satisfaction(81)
Knowledge Management(80)
Social media(79)
Genetic Algorithm(78)


» Show all keywords

✍️ Authors

Naser Azad(82)
Zeplin Jiwa Husada Tarigan(67)
Mohammad Reza Iravani(64)
Endri Endri(45)
Muhammad Alshurideh(42)
Hotlan Siagian(40)
Dmaithan Almajali(38)
Jumadil Saputra(36)
Muhammad Turki Alshurideh(35)
Ahmad Makui(33)
Barween Al Kurdi(32)
Hassan Ghodrati(31)
Basrowi Basrowi(31)
Sautma Ronni Basana(31)
Mohammad Khodaei Valahzaghard(30)
Haitham M. Alzoubi(29)
Shankar Chakraborty(29)
Ni Nyoman Kerti Yasa(29)
Sulieman Ibraheem Shelash Al-Hawary(28)
Prasadja Ricardianto(28)


» Show all authors

🌍 Countries

Iran(2199)
Indonesia(1319)
Jordan(847)
India(808)
Vietnam(512)
Saudi Arabia(503)
Malaysia(458)
China(232)
United Arab Emirates(231)
Thailand(163)
United States(116)
Egypt(116)
Turkey(115)
Ukraine(114)
Peru(96)
Canada(95)
Morocco(94)
Pakistan(87)
United Kingdom(80)
Nigeria(78)


» Show all countries

Accounting

ISSN 2369-7407 (Online) - ISSN 2369-7393 (Print)
Quarterly Publication
Volume 7 Issue 6 pp. 1363-1370 , 2021

Leverage, capital and profitability of the banks: Evidence from Saudi Arabia Pages 1363-1370 Right click to download the paper Download PDF

Authors: Abdul Rahman Shaik, Raj Bahadur Sharma

doi 10.5267/j.ac.2021.4.001
Crossmark

Keywords: Debt, Equity, Capital, Return on Assets, Return on Equity, Earnings per Share, Tier 1 capital, Total Debt, Banks, Saudi Arabia

Abstract: The study examines the effect of leverage and capital on the profitability of selected Saudi Arabian Banks during the period 2014 and 2019. The banks have been selected based upon their size in terms of total assets. The profitability elements, such as Earnings per Share (EPS), Return on Assets (ROA), and Return on Equity (ROE) are the dependent variables; Total Debt Ratio (TDR), Tier 1 Capital Ratio (Tier 1 CAP), and Debt to Equity Ratio (DE) are the independent variables, and firm size is the control variable. The study estimates a pooled regression analysis to analyze the effect of these variables. The results of the study show that there is a positive relationship between the different profitability variables and Debt to Equity Ratio. The Total Debt Ratio is having positive association with ROA and ROE, and has an insignificant negative relationship with the EPS, and the Tier 1 capital ratio is having positive association with ROA and ROE, and has an insignificant relationship with the EPS.

How to cite this paper

Shaik, A & Sharma, R. (2021). Leverage, capital and profitability of the banks: Evidence from Saudi Arabia.Accounting, 7(6), 1363-1370.

References
ABUBAKAR, A. (2017). Financial leverage and financial performance of quoted industrial goods firms in Nigeria. KASU Journal of Management Science, 8(2), 89-108.
Adesina, J. B., Nwidobie, B. M., & Adesina, O. O. (2015). Capital structure and financial performance in Nigeria. International Journal of Business and Social Research, 5(2), 21-31. DOI:10.18533/IJBSR.V5I2.710
Afolabi, A., Olabisi, J., Kajola, S. O., & Asaolu, T. O. (2019). Does leverage affect the financial performance of Nigerian firms?. Journal of Economics & Management, 37, 5-22. DOI: 10.22367/jem.2019.37.01
Ahmad, N., Salman, A., & Shamsi, A. (2015). Impact of financial leverage on firms’ profitability: An investigation from cement sector of Pakistan. Research Journal of Finance and Accounting, 6(7), 2222-1697
Ahmad, R. (2016). A study of relationship between liquidity and profitability of standard charterd bank Pakistan: Analysis of financial statement approach. Global Journal of Management and Business Research, 6(10).
Akhtar, S, Jave, B., Maryam, A., & Sadia, H. (2012), Relationship between financial leverage and financial performance: Evidence form fuel & Energy Sector of Pakistan. European Journal of Business and Management, 4(11).
Ali, M. (2020). Impact of leverage on financial performance (Evidence from Pakistan food and fertilizer sector). Journal of Critical Reviews, 7(13), 447-456. doi: 10.31838/jcr.07.13.79
Almajali, A. Y., Alamro, S. A., & Al-Soub, Y. Z. (2012). Factors affecting the financial performance of Jordanian insurance companies listed at Amman Stock Exchange. Journal of Management Research, 4(2), 266.
Al-Tally, H. A. (2014). An investigation of the effect of financial leverage on firm financial performance in Saudi Arabia's public listed companies (Doctoral dissertation, Victoria University).
Bagais, O., & Aljaaidi, K. (2020). Corporate governance attributes and firm performance in Saudi Arabia. Accounting, 6(6), 923-930. doi: 10.5267/j.ac.2020.8.005
Barakat, A. (2014). The impact of financial structure, financial leverage and profitability on industrial companies shares value (applied study on a sample of Saudi industrial companies). Research Journal of Finance and Accounting, 5(1), 55-66.
Bauer, P. (2004). Determinants of capital structure: empirical evidence from Czech. Journal of Economics and Finance, 54, 1-21.
Mangalam, S., & Govindasamy, P. (2010). Leverage- An Analysis and its Impact On Profitability With Reference to Selected Cement Companies in India. European Journal of Economics, Finance and Administrative Sciences, 27, 53-65
Dalci, I. (2018). Impact of financial leverage on profitability of listed manufacturing firms in China. Pacific Accounting Review. 30(12), 410-432. DOI: 10.1108/PAR-01-2018-0008
Daryanto, W., Samidi, S., & Siregar, D. (2018). The impact of financial liquidity and leverage on financial performance: Evidence from property and real estate enterprises in Indonesia. Management Science Letters, 8(12), 1345-1352. DOI: 10.5267/j.msl.2018.9.005
Ebiringa, O. T., & Ezeji, E. C. (2012). Analysis of effect of financing leverage on bank performance: Evidence from Nigeria. Journal of Public Administration and Governance, 2(4), 178-187. DOI: 10.5296/jpag.v2i4.3036
Gill, A. S., Mand, H. S., Sharma, S. P., & Mathur, N. (2012). Factors that influence financial leverage of small business firms in India. International Journal of Economics and Finance, 4(3), 33-45. DOI: 10.5539/ijef.v4n3p33
Gweyi, M. O., & Karanja, J. (2014). Effect of financial leverage on financial performance of deposit taking savings and credit co-operative in Kenya. International Journal of Academic Research in Accounting, Finance and Management Studies, 4(2), 176-184.
Ho, S. J., & Hsu, S. C. (2010). Leverage, performance and capital adequacy ratio in Taiwan's banking industry. Japan and the World Economy, 22(4), 264-272. https://doi.org/10.1016/j.japwor.2010.06.007
Ilyukhin, E. (2015). The impact of financial leverage on firm performance: Evidence from Russia. Корпоративные финансы, 9(2), 24-36. DOI: 10.17323/j.jcfr.2073-0438.9.2.2015.24-36
Javed, Z. H., Rao, H. H., Akram, B., & Nazir, M. F. (2015). Effect of financial leverage on performance of the firms: Empirical evidence from Pakistan. SPOUDAI-Journal of Economics and Business, 65(1-2), 87-95.
John, A. O., Odutola, O. J., & Olurotimi, O. E. (2015). Effect of financial leverage on corporate performance: Evidence from Nigerian hospitality industry. Grawford Journal of Business & Social Science, 8(11), 15-21.
Keown, A.J., Martin, J.D., Petty, J.W., & Scot, D.F. (2003). Foundation of Finance. Person Education Limited, New Jersey.
Kumar, D. M. (2014). An Empirical Study on Relationship between Leverage and Profitability in Bata India Limited. International Journal of Advance Research in Computer Science and Management Studies, 2(5), 1-9.
Morellec, E. (2004). Can managerial discretion explain observed leverage ratios?. The Review of Financial Studies, 17(1), 257-294. https://doi.org/10.1093/rfs/hhg036
Mukras, M. S. (2015). Financial leverage and performance of listed firms in a frontier market: Panel evidence from Kenya. European Scientific Journal, 11(7), 534-550. DOI:10.19044/ESJ.2015.V11N7P%P
Obradovich, J., & Gill, A. (2013). The impact of corporate governance and financial leverage on the value of American firms. 91(1), 1-14.
Pratheepkanth, P. (2011). Capital structure and financial performance: evidence from selected business companies in Colombo stock exchange Sri Lanka. Researchers World, 2(2), 171-183.
Shaik, A.R., & Sharma, R.B. (2020). Cash flows and financial performance in the industrial sector of Saudi Arabia: With special reference to Insurance and Manufacturing Sectors. Investment Management and Financial Innovations, 17(4), 76-84. doi:10.21511/imfi.17(4).2020.07
Singh, A. K., & Bansal, P. (2016). Impact Of Financial Leverage On Firm’s Performance And Valuation: A Panel Data Analysis. Indian Journal of Accounting, 2, 73-80.
Tripathy, S., & Shaik, A.R. (2020). Leverage and firm performance: Empirical evidence from Indian food processing industry. Management Science Letters, 10(6), 1233-1240. doi: 10.5267/j.msl.2019.11.035
Ujah, U., & Brusa, O. (2013). The Effect of Financial Leverage and Cash Flow Volatility on Earnings Management. Texas A & M International University.
Wabwile, E. S., Chitiavi, M. S., Alala, O. B., Douglas, M., Khoo, V., Obeid, M., & Islam, M. (2014). Financial Leverage and performance variance among banks: evidence of tier 1 commercial banks listed on Nairobi Security Exchange Kenya. International Journal of Business and Management Invention, 3(4), 01-13.
Zeitun, R., & Saleh, A. S. (2015). Dynamic performance, financial leverage and financial crisis: evidence from GCC countries. EuroMed Journal of Business. 10(2), 147-162. DOI 10.1108/EMJB-08-2014-0022
  • 34
  • 1
  • 2
  • 3
  • 4
  • 5

Journal: Accounting | Year: 2021 | Volume: 7 | Issue: 6 | Views: 2439 | Reviews: 0

Related Articles:
  • How do financial leverage and supply chain finance influence firm performance? Evidence from construction sector
  • The impact of financial flexibility on capital structure decisions: Some empirical evidence
  • The impact of risk management on internal and sustainable growth rate: Evidence from Tehran Stock Exchange
  • Investigating the effect of growth and financial strength variables on the financial leverage: Evidence from the Tehran Stock Exchange
  • The examination of signaling theory versus pecking order theory: Evidence from Tehran Stock Exchange

Add Reviews

Name:*
E-Mail:
Review:
Bold Italic Underline Strike | Align left Center Align right | Insert smilies Insert link URLInsert protected URL Select color | Add Hidden Text Insert Quote Convert selected text from selection to Cyrillic (Russian) alphabet Insert spoiler
winkwinkedsmileam
belayfeelfellowlaughing
lollovenorecourse
requestsadtonguewassat
cryingwhatbullyangry
Security Code: *
Include security image CAPCHA.
Refresh Code

® 2010-2026 GrowingScience.Com