Proceedings of The 10th International Conference on Modern Research in Management, Economics and Accounting
The Capital Structure Impacts on Firms’ Performances the Case of Jordanian Insurance Firms
Ahmed Al Omush
This study seeks to investigate the impact of capital structure on firm performance by analyzing the relationship between the operating performance of Insurance companies listed in the Amman Stock Exchange during the period 2014- 2019, measured by return on asset (ROA) and return on equity (ROE) with short-term debt (STD), long-term debt (LTD) and total debt (TD). The study has shown a positive relationship between short term debt and return on equity and a negative correlation between long term debt and return on investment. Therefore suggesting that Insurance sector utilize more short term debt because of low-interest expenses and most Insurance companies suffer losses because using excessive long term debt and a large amount of financial cost. Thus Insurance companies firms utilize debt, but more portion of financing should be through short term debt (STD)andlong-term debt (LTD) in less proportion.
Keywords: Capital Structure, Operation Performance, Insurance sector, Debt.