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    Conclusion

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    Asadvirk
    This study analyzed the financial statements of 19 insurance companies in Pakistan from 2008-2012 to determine the relationship between capital structure and profitability. The analysis found that a company's capital structure, whether it uses more debt or equity, significantly impacts its profitability. Specifically, the capital structure of 30% of companies had a positive impact on profitability, while 70% had a negative impact. The study aims to help insurance company management understand how to structure their capital for maximum profitability.

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    Conclusion

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    Asadvirk
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    This study analyzed the financial statements of 19 insurance companies in Pakistan from 2008-2012 to determine the relationship between capital structure and profitability. The analysis found that a company's capital structure, whether it uses more debt or equity, significantly impacts its profitability. Specifically, the capital structure of 30% of companies had a positive impact on profitability, while 70% had a negative impact. The study aims to help insurance company management understand how to structure their capital for maximum profitability.

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    This study analyzed the financial statements of 19 insurance companies in Pakistan from 2008-2012 to determine the relationship between capital structure and profitability. The analysis found that a company's capital structure, whether it uses more debt or equity, significantly impacts its profitability. Specifically, the capital structure of 30% of companies had a positive impact on profitability, while 70% had a negative impact. The study aims to help insurance company management understand how to structure their capital for maximum profitability.

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    © All Rights Reserved
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    Download as docx, pdf, or txt
    2K views3 pages

    Conclusion

    Uploaded by

    Asadvirk
    This study analyzed the financial statements of 19 insurance companies in Pakistan from 2008-2012 to determine the relationship between capital structure and profitability. The analysis found that a company's capital structure, whether it uses more debt or equity, significantly impacts its profitability. Specifically, the capital structure of 30% of companies had a positive impact on profitability, while 70% had a negative impact. The study aims to help insurance company management understand how to structure their capital for maximum profitability.

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    © All Rights Reserved
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    of 3

    CONCLUSION

    The basic purpose of this research is to study and to define the factors which have effect
    on insurance companies profitability. In this study, we have identified the different variables in
    companys profitability and capital structure of the company and built a relationship between
    them. Profitability of insurance company depends on capital structure of the company.
    Does capital structure impact on insurance companys profitability? So that researcher
    has used ratio analysis technique. Its a very efficient way to check the capital structures impact
    on insurance sectors profitability. In this study researcher has found the profitability ratio
    analysis and solvency ratio analysis of listed insurance companies in Karachi Stock Exchange
    (KSE).
    The basic purpose of financial statements is to provide information about the financial
    performance of insurance companies. This information is important for finance management
    and shareholder of the insurance companies. In this project researcher has compared the financial
    statements of all insurance companies listed in Karachi Stock Exchange (KSE) from 2008-2012.
    In this analysis data is collected from insurance companys websites and KSE, SECP.
    For comparing and analyzing the financial statements of listed insurance companys
    researcher used profitability ratios and solvency ratio analysis.
    In profitability analysis of insurance companies and solvency analysis of insurance
    companies one Company is taken as bench mark. Benchmark Company is selected because it has
    highest total assets in the whole insurance industry for last five years 2008-2012.
    In both analysis researcher has compared all insurance companies ratio with bench mark
    insurance company ratio and also use ratio graphs for efficient analyzing the ratios.
    In this study researcher analyzed the financial statement of 19 insurance companies listed
    in Karachi Stock Exchange for a period of 5 years 2008-2012 and researcher use
    secondary data.
    After the completion of study researcher has established the significant impact of
    companys capital structure on profitability of insurance companies. This study indicates that
    capital structure of the insurance sector has both direct and indirect relation on profitability of
    insurance companies. Five years 2008-2012 financial performance analysis of insurance
    companies illustrates that 30% percent insurance companies capital structure has positive
    relation on profitability and 70% percent insurance companies capital structure has negative
    relation on profitability of insurance companies.


    RECOMMENDATION
    The study is designed to determine the importance of insurance sector in economy from the
    perspective of company performance. Insurance sector play a very significant role in the
    economy of Pakistan. Insurance companies provide employment opportunity, promotion of
    saving, removal of uncertainties, and source of credit and promotion of international trade,
    growth of business competitors. This study will assist the management to knowhow to get
    maximum profitability and how to efficient manage capital structure of the insurance companies.
    Large companies prefer debt financing in the company and take more risk. If companies take
    more risk so get more gain. On the other side small companies prefer equity financing because
    they dont want to take high risk and dont face any high risky condition.
    The main reason behind this is that large insurance companies have high capacity for dealing
    with adverse market fluctuation as compare to small insurance companies. Large insurance
    companies easily recruit the employees as compare to the small insurance companies. This
    research is being conduct to find the efficient capital structure and variables or factor impact on
    profitability of the company.
    In insurance companies the profitability of the company is calculate to use these methods or
    formulas like (ROA) return on assets ,(ROIC) return on investment capital ,(ROE) return on
    equity (Malik, Nov 2011).

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