The Impact of Capital Structure on Financial Performance of the Insurance Companies in the Egyptian Stock Exchange

نوع المستند : المقالة الأصلية

المؤلفون

1 مدرس باكادبمية السادات للعلوم الإدارية

2 مدرس إدارة الأعمال باكاديمية السادات للعلوم الإدارية

٣10.21608/rijcs.2024.319208.1165

المستخلص

This paper examines the effect of capital structure on the financial performance of insurance companies in the Egyptian stock market from June 2020 to June 2024There are only two insurance companies on the Egyptian Stock Exchange, which are Al Mohandes Insurance Company (MOIN) and Delta Insurance Company (DEIN). Stock returns, Return on Assets (ROA), Return on Equity (ROE) and Earning per Share (EPS) were used to represent the financial performance. Both debt-to-assets and debt-to-equity ratios were used as a proxy for capital structure. The study also used the increase in capital of these companies as a proxy for the capital structure to test the impact of capital increase on the financial performance of these companies by collecting data before the capital increase and after the capital increase. The Kolmogorov–Smirnov test is used to test the normality. The paired sample t-test is used to compare the financial performance of the insurance company before and after capital increase for data that is normally distributed. The Wilcoxon signed-rank test is used to compare the financial performance of the insurance company before and after capital increase for data that are not normally distributed. Regression analysis was also used to determine the effect of independent variables on the dependent variable. The results showed that increasing capital in the insurance companies does not affect financial performance. Also, the capital structure does not have a statistically significant impact on the financial performance.

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