Abstract:
financial facilities with equity having the emphasis on maximizing the firms value. And also its affects the liquidity and profitability of a firm. Therefore this study focused on the impact of capital structure on the profitability of listed manufacturing companies in the Colombo Stock Exchange in Sri Lanka. The primary objectives of this study are to investigate the significant impact of capital structure on profitability and find out the significant relationship between capital structure and profitability of listed manufacturing companies in Sri Lanka. In this regard, researcher has selected a sample of 20 manufacturing companies listed on the CSE in Sri Lanka during the year from 2009 – 2013. For the purpose of this study, the secondary data was extracted from the annual reports of sample listed manufacturing companies. Multiple regression and correlation analysis were used with the SPSS - 16 versions.
The results indicate that the capital structure of the manufacturing companies listed on Colombo Stock Exchange has a significant impact on profitability. Moreover the findings revealed that there is a significant negative relationship between LDA and profitability while there is a positive strong relationship between TDA and profitability. But there is an insignificant negative relationship between SDA and profitability of manufacturing listed companies in the CSE in Sri Lanka.
