Degree of Financial and Operating Leverage and Profitability of Insurance Firms in Ghana

John Gartchie Gatsi, Samuel Gameli Gadzo, Richard Kofi Akoto


The profitability of any business entity for a particular time period can be conceptualized as the final outcome of its investing and operating activities. This paper investigated how profitability of insurance firms in Ghana, is influenced by working capital management and leverage using 18 firms. The current ratio was taken as representative of the result of working capital management policy and financial leverage and operating leverage as the bench mark for capital structure. Supplementary analysis was also undertaken to assess the impact of premium growth, GDP and firm size on profitability. Panel data methodology was used to determine whether profitability of insurance companies is related to selected indicators in accordance with the accepted finance theory. Furthermore, the research results found that, degree of financial leverage and liquidity are inversely related to profitability while operating leverage is positively related to profitability.
Key words: Profitability; Working capital management; Operating and financial Leverage


Profitability; Working capital management; Operating and financial Leverage

Full Text:




  • There are currently no refbacks.

Copyright (c)

Share us to:   


  • How to do online submission to another Journal?
  • If you have already registered in Journal A, then how can you submit another article to Journal B? It takes two steps to make it happen:

1. Register yourself in Journal B as an Author

  • Find the journal you want to submit to in CATEGORIES, click on “VIEW JOURNAL”, “Online Submissions”, “GO TO LOGIN” and “Edit My Profile”. Check “Author” on the “Edit Profile” page, then “Save”.

2. Submission

  • Go to “User Home”, and click on “Author” under the name of Journal B. You may start a New Submission by clicking on “CLICK HERE”.

We only use three mailboxes as follows to deal with issues about paper acceptance, payment and submission of electronic versions of our journals to databases:;;

 Articles published in International Business and Management are licensed under Creative Commons Attribution 4.0 (CC-BY).


Address: 9375 Rue de Roissy Brossard, Québec, J4X 3A1, Canada 
Telephone: 1-514-558 6138 
Website: Http:// Http://

Copyright © 2010 Canadian Research & Development Centre of Sciences and Cultures