Browsing by Author "SUSAN WAIRIMU MUGO"

Now showing 1 - 1 of 1
  • Thumbnail Image
    Item
    EFFECT OF CAPITAL STRUCTURE ON RETURN ON ASSET OF COMMERCIAL AND SERVICES FIRMS LISTED AT NAIROBI SECURITY EXCHANGE
    (THE CATHOLIC UNIVERSITY OF EASTERN AFRICA, 2025-10) SUSAN WAIRIMU MUGO
    The way a company is financed is discussed and debated around the globe. More attention is given to capital structure in developed countries than in countries that are still developing. Reviewing what conditions influence how much capital little list companies raise is the basis for capital structure research. It was intended to understand how the structure of capital affects the Return on Assets of listed Commercial and Services Firms in Kenya during the years 2020–2024. The investigation had set aims which included observing how retained earnings, share capital, debt and equity play a part in establishing the capital structure and to use ROA as the main gauge of financial results. The basis of the study was mainly the Modigliani and miller, Trade off, Pecking order and Agency theories. Data from audited financial statements from Commercial and Services Firms listed at Nairobi Security Exchange, instructions from the Capital Market Authority handbook, magazines, business journals, articles and websites was the secondary information used. Descriptive research was the method and statistical methods such as data analysis, correlation analysis and multiple regression analysis were used to look at the data. All Commercial and Services Companies listed on the Nairobi Security Exchange made up the population. For the research, the sample used were all organizations that were entered by the employees. It was found by research, however, that not all the companies supplied the data required for public access. Two other companies stopped running their operations for the time it took to collect the data. Retained earnings, share capital and return on asset all appear to be related for the Commercial and Services Firms listed at NSE, Kenya. When if rises, return on assets declines and this trend is significant for Commercial and Service Firms on the NSE, Kenya. Also, at NSE, Kenya, equitable companies in Commercial and Service Firms don’t have a statistically significant impact on their return on assets. The study recommended that a holistic approach to capital structure—considering internal reinvestment, shareholder capital, and cautious borrowing—can enhance firm profitability and financial sustainability. Moreover, aligning policy frameworks, corporate financial practices, and theoretical models with these findings will enable stakeholders to make more informed decisions that foster long-term value creation within Kenya’s Commercial and Service Sectors.