© 2022, IJSRMS All Rights Reserved 69 International Journal of Scientific Research in ___________________________ Research Paper. Multidisciplinary Studies E-ISSN: 2454-9312 Vol.8, Issue.4, pp.69-74, April (2022) P-ISSN: 2454-6143 Effect of Firm Age, Size, Tangibility and Profit leverage optimise Capital Structure in Oman Food Industry Abilash KM Department of Commerce, Pachaiyappa’s College, University of Madras, Chennai, India Author’s Mail Id: abilashraji@gmail.com Available online at: www.isroset.org Received: 28/Feb/2022, Accepted: 30/Mar/2022, Online: 30/Apr/2022 Abstract - This study analyses with capital structure determinants of Oman food industry firm’s characteristics during the period of 2016-2020. This study will be assessing 14 companies which listed in Muscat Securities Market for the period of 5 years. Purpose sampling method has been used for this study. Financial leverage is considered as dependent variable and size, profit, tangibility and market to book ratio as independent variables. Obtained results shows leverage, size, and profit level is not good in food industry, whereas tangibility and market-to-book ratio value is good. Companies who have low profit and show positive correlation between leverage and tangibility should not borrow from market to avoid any intricacies in future. This study also exhibit that firm leverage has not have any relationship with financial performance of Oman food industry for selected sample period. Eventually, from this study researcher has observed that profit plays a vital role in firm development more than its size and tangibility to expand its business functions. It is recommended by this research that firm managers of Oman food industry should focus more on generating profit activities in operating functions among other determinants. This research can assist Oman food industry firm managers to initiate preventive action before implementation of any financing or operating decision in their domain. This study also emphasise with contemporary literature who experimented with capital determinants in different phase which enhance corporate managers thoughts to resist any challenges. Keywords: Capital Structure; Leverage; Size; Muscat Securities Market; Food industry I. INTRODUCTION Capital structure is significantly considered as vital decision for any entity to maximise shareholder wealth and navigates the firms to finance its assets through by in form of any investment. In terms of financial decisions, corporates focus on policies such as income enhancement, asset management, dividends, and others etc. Mostly, firms which desire to enrich and enhance the operating activities with precise fundamental decision and keep the target to ensure leverage cost and benefits are balanced at margin. [17] [32] In today’s global environment, companies are struggling to maintain enough liquidity to survive in the market due to emerge of novel complication and finding multiple ways to evade of its contractions. [4] To expand the size of firm, business requires high capital, so there are four different methods are used by firm to acquire high capital which is: from seed investors, retained earnings, by taking out loans or issuing bonds, and by selling shares. Mostly the firms often prefer with the choice of debt and equity to finance their assets. But also, there are some risks can accompany with this option which, if the managers proceed with incorrect decision without any analysis, it can lead to bankrupt. [21] [14] Companies’ raises finance by many factors such as existing level of operating leverage, cost of capital, impact on corporate control, financial distress costs and other tax implications. Many researchers and financial managers are curious to investigate about, does value of company can affect if capital is not being sourced till what extent. [12] Firms use capital structure as mix of securities to supply money and make investments in physical assets. Theories like pecking order theory and trade off theory plays an intensive role in entity’s financing decisions. Among two theories some disagreements also exist that which one has explained better for firm capital structure decisions. To obtain gain from tax shields, profitable firms prefer to increase debt in trade off theory. Whereas profitable entities give more preference on utilize from internal funds to reduce debt and less significance of using external funds when retained earnings are insufficient. [15] To measure firm performance, using indicators such as Debt ratio, earning per share (EPS), Return on Equity (ROE), Return on Asset (ROA) as capital structure variable and some determinants are growth, size, age, leverage, tangible and market to book ratio. [22][ 11] The purpose of this research is to investigate below objectives with 14 listed Oman food industries in muscat securities market from 2016-2020 using pairwise correlations and linear regression to identify to examine the firm leverage can increase financial performance of Oman food industry and analyse firm size, have any influence of generate profit for firm development.