IMPROVING CORPORATE VALUE THROUGH CAPITAL STRUCTURE, COMPANY SIZE, AND PROFITABILITY OF PUBLICLY

LISTED MANUFACTURING FIRMS

A Thesis
Presented to the Faculty of
College of Accountancy, Business, Economics, and
International Hospitality Management
Batangas State University
Pablo Borbon Campus

In Partial Fulfillment
of the Requirements for the Degree
Bachelor of Science in Maangement Accounting

By:
Paul Jhenlei C. Gabi
Ma. Elaine R. Macatangay
Mark Henry A. Decepida
December 2023
 APPROVAL SHEET
This thesis, IMPROVING CORPORATE VALUE THROUGH CAPITAL STRUCTURE, COMPANY SIZE, AND
PROFITABILITY OF PUBLICLY LISTED MANUFACTURING FIRMS, prepared and submitted by Paul Jhenlei C. Gabi, Ma. Elaine R.
Macatangay, and Mark Henry A. Decepida in partial fulfillment of the requirements for the degree of Bachelor of Science in Management Accounting, has
been examined and is recommended for acceptance for oral examination.
ANGELO C. PANILAGAN
Adviser
Approved by the Committee on Oral Examination with a grade of ______
PANEL OF EXAMINERS

JOSEPH D. MENDOZA, MBA

Chairperson

JAYSON B. REYES, MBA, LESLIE T. CALCETAS,

Member Member
Accepted and approved in partial fulfillment of the requirements for the degree Bachelor of Science in Management Accounting.

_________________ BENDALYN M. LANDICHO, Ph.D., AFBE Date

Dean, CABEIHM
ACKNOWLEDGMENT
The researchers express their immense gratitude for the great people who have contributed a lot in the completion of the study.

To Batangas State University, for guiding and supporting their knowledge development

to accomplish this study more productively and creatively. To the research adviser, Mr. Angelo C. Panilagan, for the

supervision, support, and expertise given to the researchers to complete the study and for giving them freedom to explore their potential in carrying out

the study. To the panelist, Mr. Joseph D. Mendoza, Mr, Jayson B.

Reyes, and Ms. Leslie T. Calcetas, for the comments, recommendations, and motivation to improve the study and for the expertise they imparted to help

the researchers better understand the study. To the statistician, Mr. Mark Louis Javier, for providing comments and wise criticism

that helped them conduct the study smoothly. To the subject of the study,

Manufacturing Companies in the Philippine Stock Exchange, for giving access to the financial information, making the study feasible.

To the family, friends, and classmates of the researchers, for helping out with the financial needs and being the support system of the

researchers. This would have not been possible without their unwavering love, care, support, and encouragement; and

Most importantly, to the Almighty God, for the strength, protection, guidance, and wisdom given to the researchers to accomplish the study.

Paul Jhenlei

Ma. Elaine
 Mark Henry

ABSTRACT
This paper is entitled “Improving Corporate Value Through Capital Structure, Company Size, and Profitability of Publicly Listed

Manufacturing Firms”. This study aimed to determine the effect of capital structure, company size, and profitability on corporate value. This study

described capital structure in terms of debt to equity ratio; assessed company size in terms of total revenue, and total assets; and assessed profitability in

terms of return on asset and return on equity. The study utilized secondary data which covers the financial statements of 27 publicly listed

manufacturing firms from 2018 to 2022. The statistical tools used in the study were mean, standard deviation, and linear regression analysis.

Based on the findings, corporate value, as proxied by debt to equity ratio, shows a significant positive effect on corporate value. On the other

hand, company size, represented by total revenues and total assets, is not a significant predictor of corporate value. In addition, profitability, in terms of

return on assets revealed a significant positive effect on corporate value. However, when represented by return on equity, profitability has no significant

effect on corporate value.

iii
 TABLE OF CONTENTS

Page

TITLE PAGE ........................................................................................... i

APPROVAL SHEET .............................................................................. ii

ACKNOWLEDGMENT .......................................................................... iii

ABSTRACT ……………………………………………...…………….. iv

TABLE OF CONTENTS ........................................................................ v

LIST OF TABLES .................................................................................. vii

LIST OF FIGURES ................................................................................ viii

CHAPTER

I. THE PROBLEM

Introduction ………………........................................................................ 1

Statement of the Problem ........................................................................... 4

Hypothesis of the Study ............................................................................. 5

Scope, Delimitation, and Limitation of the Study .................................... 5

Significance of the Study ……………...................................................... 6

II. REVIEW OF LITERATURE

Conceptual Literature ……………........................................................... 8

Research Literature ………………........................................................... 19

Theoretical Framework ………………..................................................... 28

Conceptual Framework ……………....................................................... 30

Definition of Terms ……………............................................................. 31

III. RESEARCH METHODOLOGY

iv
Research Design ......................................................................................... 34

Source of Data ………………………………………….......................... 35

Data Gathering Procedure ......................................................................... 36

Data Analysis ……………........................................................................ 36

Statistical Treatment of Data ................................................................... 37

Assumptions of the Study ........................................................................ 38

IV. PRESENTATION, ANALYSIS AND INTERPRETATION

OF DATA

Corporate Value of Publicly Listed Manufacturing Companies ............... 39

Capital Structure of Publicly Listed Companies ……............................... 42

Size of Publicly Listed Companies .......................................................... 45

Profitability of Publicly Listed Manufacturing Firms ………….............. 52

Effect of Capital Structure, Company Size, and Profitability

on Corporate Value ........................................................................ 59

Proposed Output ………………………………………………………….. 64

V. SUMMARY, CONCLUSIONS AND RECOMMENDATIONS

Summary ................................................................................................. 66

Conclusions ............................................................................................. 68

Recommendations .................................................................................. 69

REFERENCES........................................................................................ 71

APPENDICES

BIOGRAPHIC SKETCH

LIST OF TABLES

v
Table No. Title Page

1 Sample Selection Procedure 35

2 Descriptive Statistics of Price to Book Value

of Manufacturing Companies 41

3 Descriptive Statistics of Debt to Equity Ratio

of Manufacturing Companies 44

4 Descriptive Statistics of Company Size

in Terms of Total Revenues 48

5 Descriptive Statistics of Company Size

in Terms of Total Assets 51

6 Descriptive Statistics of the Profitability

of Assessed in Terms of Return on Assets 56

7 Descriptive Statistics of Profitability of

Publicly Listed Manufacturing Firms in Terms of

Return on Equity 59

8 Effect of Capital Structure, Company Size,

and Profitability on Corporate Value 60

vi
 LIST OF FIGURES

Figure No. Title Page

1 Conceptual Paradigm 30

2 Firm Value of Manufacturing Companies

in Terms of Price to Book Value 40

3 Capital Structure of Manufacturing Companies

in Terms of Debt to Equity Ratio 43

4 Size of Publicly Listed Manufacturing Firms

in Terms of Total Revenue 46

5 Size of Publicly Listed Manufacturing Firms

in Terms of Total Assets 49

6 Profitability of Publicly Listed Manufacturing

Firms in Terms of Return on Assets 53

7 Profitability of Publicly Listed Manufacturing

Firms in Terms of Return on Equity 57

8 Proposed Output 64

vii