Capital Structure and Profitability of Small and Medium Enterprises in Lusaka, Zambia

Gospel Katolo
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Gospel Katolo: University of Zambia

African Journal of Commercial Studies, 2026, vol. 7, issue 5

Abstract: This study examines the relationship between capital structure and profitability among small and medium enterprises in Lusaka, Zambia. A quantitative cross-sectional design was used, and structured questionnaires were administered to a target sample of 397 enterprises. A total of 355 usable responses were obtained, representing an 89.4% response rate. Profitability was measured using ordinal categories of return on assets, while capital structure was represented by total debt to assets and long-term debt to assets; sales growth was included as a control variable. The instrument demonstrated acceptable internal consistency (Cronbach's alpha = 0.71). Pearson correlation showed a weak positive association between total debt to assets and return on assets (r = 0.159, p = 0.003). The multiple regression model was statistically significant (F(3,351) = 9.939, p

Keywords: Capital Structure; Profitability; Small and Medium Enterprises; Long-Term Debt; Return on Assets; Zambia (search for similar items in EconPapers)
JEL-codes: G32 L25 L26 O16 (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:cwk:ajocsl:2026-082

DOI: 10.59413/ajocs/v7.i5.16

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