Determinants of Capital Structure: A Case Study of Al-Madar Al-Jadeed Mobile Phone Company
DOI:
https://doi.org/10.64943/jkc.2026.040203Keywords:
Capital structure determinants, financial leverage, profitability, liquidity.Abstract
This study aimed to analyze the impact of financial structure determinants—namely profitability (ROE), liquidity (Liq), tangible assets (Ting), and sales growth (Grow)—on the level of financial leverage (DER) of Almadar Aljadid Mobile Company in Libya, over the period 2001–2023. The findings revealed that sales growth is the only statistically significant determinant influencing financing decisions, as it drives the company to increase financial leverage. This indicates that operational expansion constitutes the primary justification for borrowing. In contrast, profitability, liquidity, and tangible assets showed no significant effect on financing decisions. These results clearly suggest that the classical assumptions of the Pecking Order Theory do not fully apply to the case of this company.
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