The Impact of Capital Structure on the Financial Performance of Financial Institutions in Ghana

Abstract

: The study aimed to discover how capital structures (capitalization ratios and debt-to-EBITDA ratios) affect the financial performance of Ghanaian financial institutions. The study selected 15 financial institutions in Ghana using a purposive sampling strategy. Ten (10) financial organizations are listed on the Ghana Stock Exchange, while the remaining five (5) are not. The data was gathered from their audited annual report. The Stata software analyzed the data into fixed and random effects. The Hausman specification test was used to determine the appropriate method to present the study results. The random effect was considered the appropriate method to present the study's findings. We discovered that the capitalization ratio has a negative effect on the net interest margin, loan-to-asset ratio