The impact of working capital and financial structure on profitability of islamic banking industry

Valahzaghard, M.; Taherinejhad, A.

Management Science Letters

ISSN 1923-9343 (Online) - ISSN 1923-9335 (Print) Quarterly Publication Volume 2 Issue 7 pp. 2625-2630 , 2012

The impact of working capital and financial structure on profitability of islamic banking industry Pages 2625-2630 Download PDF

Authors: Mohammad Khodaei Valahzaghard, Ali Taherinejhad

DOI: 10.5267/j.msl.2012.06.045

Keywords: Financial leverage, Financial structure, Return of assets

Abstract: In this paper, we present an empirical survey on selected Iranian banks operating actively from 2005 to 2010. The proposed study considers the impacts of four important factors including degree of financial leverage, bank size, working capital and liquidity on return on asset as a primary source of measuring profitability of Iranian banking system. The survey uses Pearson correlation test along with simple and multi regression analysis to study the behavior of these four factors on profitability of banking system. Based on the results of this survey, a high level of working capital and financial leverage will result to lower profitability in Iranian private banks.

How to cite this paper

 Valahzaghard, M & Taherinejhad, A. (2012). The impact of working capital and financial structure on profitability of islamic banking industry.Management Science Letters , 2(7), 2625-2630.

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