Impact of Capital Structure on Financial Performance of Listed Manufacturing Companies in Tanzania – Evidence From Listed Manufacturing Companies in Tanzania

Abstract

This paper evaluates the impact of capital structure on the financial performance of listed manufacturing companies in Tanzania. The study was guided with three predicting variables namely internal equity, leverage and external equity; tested towards financial performance measured using return on assets (ROA). The study employed explanatory design that knowledge generation was facilitated by means of causal relationship testing. Secondary data were used in facilitating knowledge generation process covered the period of eight (8) years between 2016-2023. The collected information were computed in Excel sheet and imported in E-view software to generate statistical tests to present the results. Regression analysis through ordinal least square (OLS) model was used to describe the relationship between study variables. results indicate that all three tested predictors to the dependent variable namely internal equity, external equity and leverage are positive with significant results towards financial performance among listed manufacturing companies with p<0.05. This implies that financial performance of listed manufacturing companies in Tanzania through return on assets (ROA) is positively influenced with internal equity, leverage and external equity respectively.