Thesis on Capital Structure

Topics: Finance, Capital structure, Corporate finance Pages: 109 (26846 words) Published: July 29, 2013
CAPITAL STRUCTURE MANAGEMENT IN NEPAL
(A CASE STUDY ON NABIL, NIBL, NEA, NTC & HGICL)

Table of Contents:
RecommendationI
Viva- Voce SheetII
DeclarationIII
Acknowledgement IV
List of FiguresV
List of Tables VI
AbbreviationVII

CHAPTER I. INTRODUCTION Pg No. 1. Background of the study 1 2. History of bank 5 3. Growth of industries in Nepal 5

4. Statement of problem7
5. Objectives of the study8
6. Significance of the study8
7. Limitations of the study8
8. Organization of the study9

CHAPTER II. REVIEW OF LITERATURE
1. Conceptual Framework11
1. Theories of Capital Structure15
2.1.2Checklist For A Target Capital Structure28
2.1.3The Capital Structure Decisions33
2. Review of Related Studies34
2.2.1Review of Articles34
2.2.2Review of Thesis35
2.3Research Gap37

CHAPTER III. RESEARCH METHODOLOGY
1. Introduction39
2. Research Design40
3. Period Covered41
4. Selection of Enterprises41
5. Types and Sources of data42
6. Data Processing Procedure42
7. Data Presentation and Method of Analysis42
1. Financial Analysis Tools43
• Ratio Analysis43
• Standards of Comparison44
• Capital Structure or Leverage Ratios44
• Financial Leverage46
• Capital Adequacy Ratios47
• Other Indicators47
2. Statistical Analysis Tools49
• Correlation Coefficient49
• Regression Analysis50
• Trend Analysis51

CHAPTER IV. DATA PRESENTATION AND ANALYSIS
1. Introduction52
2. Financial Analysis Tools52
1. Capital Structure or Leverage Ratio52
• Long term debt to shareholder's fund ratio52 • Total debt to shareholder's fund ratio54
• Total debt to total assets ratio55
• Interest coverage ratio (Debt capacity ratio)56 • Analysis of Earning Per Share (EPS) and Financial Leverage(FL)58 2. Capital Adequacy Ratio60
• Capital fund to total deposit ratio60
• Risky assets to capital ratio62
3. Other Indicators63
• Return on capital employed (ROCE)63
• Return on shareholder's equity (ROSE)64
• Return on assets (ROA)65
• Credit to deposit ratio 66
3. Statistical Analysis Tools68
• Correlation Analysis68
• Regression Analysis69
• Trend Analysis69
4. Analysis of overall Value of the organization71
5. Major Findings72

CHAPTER V. SUMMARY, CONCLUSION AND RECOMMENDATION
1. Summary and Conclusion74
2. Recommendations76

Bibliography
Annex

List of Figures

Fig No.TitlePage No.

2.1Composition of Capital 12
2.2Net Income Approach (Cost)18
2.3Net Income Approach (Value)18
2.4Net Operating Income Approach (Cost)20
2.5Net Operating Income Approach (Value)20
2.6The Cost of Capital Behaviour (Traditional View)23
2.7The Cost of Capital Behaviour(Traditional view-a-variation)23 2.8The Capital Structure Decisions33
3.1Flowchart of entire Methodology40
4.1Long term debt to total shareholders raito53
4.2Total debt to total shareholders ratio54
4.3Total debt to total assets ratio56
4.4Interest Coverage ratio57...
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