4 Define your 4thword or phrase. Provide strengths and weaknesses from literature about the topic. Provide at least 4 references. Analyse your hypothesis about this topic and discuss your conclusion..

4: Define your 4^thword or phrase. Provide strengths and weaknesses from literature about the topic. Provide at least 4 references. Analyse your hypothesis about this topic and discuss your conclusion.

The FINAL business research proposal will consist of the following items:

Abstract

Chapter 1 Introduction (Completed: Its initial proposal which is attached)

Chapter 2 Literature Review (Completed: its Literature Review which is attached)

Chapter 3 Data Collection and Analysis

Chapter 4 Discussion of Results

Chapter 5 Conclusion and Future Work

Bibliography

Appendix

Recommendations on how to write the final report:

Abstract:
150 to 200 words with a brief description of your business research topic, its business significance, research methods used and research results.

Chapter 1 (4-5pages) Introduction: From Assignment 01 include:

1.1 Your business research topic. What is your topic and what is its business significance.
1.2 A brief background/literature discussion of your topic. Provide a list of research questions for the identified business problem or opportunity.
1.3 A brief description of the research methodologies and techniques to be used for the research project. What research methodology will you use?
1.4 A description of the research process. What will be the steps in your project?
1.5 Outline describing what will be in each chapter of the report.

Chapter 2 (8-12 pages)Literature Review: From Assignment 02 include:

2.1 Introduction to Literature Review: Start with introduction which includes a list of the topic you will do a literature review on, what your hypotheses are from these topics that you are starting out with.

2.2 Topic 1: Define your 1^st key word or phrase. Provide strengths and weaknesses from literature about the topic. Provide at least 4 references. Analyse your hypothesis about this topic and discuss your conclusion.
2.3 Topic 2. Define your 2^ndkey word or phrase. Provide strengths and weaknesses from literature about the topic. Provide at least 4 references. Analyse your hypothesis about this topic and discuss your conclusion.
2.4 Topic 3: Define your 3^rdkey word or phrase. Provide strengths and weaknesses from literature about the topic. Provide at least 4 references. Analyse your hypothesis about this topic and discuss your conclusion.
2.5 Topic 4: Define your 4^thword or phrase. Provide strengths and weaknesses from literature about the topic. Provide at least 4 references. Analyse your hypothesis about this topic and discuss your conclusion.
2.6 Conclusion to Literature Review

Chapter 3 (6-7 pages)Data Collection and Analysis

3.1 Introduction to Data Collection and Analysis
3.2 Data Sampling Method. How will you get the data you need to test your hypotheses? What tools or devices will you use to make or record observations?How will you choose the sample? What degree of accuracy or level of confidence can you guarantee?

3.3 Data Analysis. What combinations of analytical and statistical process will be applied to the data?Which of these will allow you to accept or reject your hypotheses?

3.4 Conclusion to Data Collection and Analysis

Chapter 4 (3 pages)Discussion of Results

4.1 Discussion on Hypotheses. Was your initial hypothesis supported or rejected? Why?
4.2 Discussion on Literature and Research Results. What are the implications of your findings for the theory base, for the background assumptions, or relevant literature?

4.3 Recommendations. What recommendations result from the work?

Chapter 5 (1-2 pages)Conclusion and Future Work

5.1 Conclusion: Brief summary connecting your business research topic to your research results

5.2 Future Work: What suggestions can you make for further research on this topic?

Bibliography

At least 16 references properly referenced.

Appendix

Here you could include the PowerPoint slides from your presentation, any (empty) surveys, any extra information of value such as extra data analysis not included in the chapters.

Table of Contents

Introduction. 3

Research question. 3

Research methodologies. 3

Research design. 4

Population of the study. 4

Sample technique. 4

Data collection method. 4

Data analysis. 4

Research outcome. 6

Relevance of the study. 7

References. 8

Effects of debt financing on Australian commercial banks

Introduction

In the financial perspective debt financing takes many forms. In a debt situation, a borrower has a duty to repay the funds with the service charges agreed-upon, which includes interest and loan origination charges. In case the funds are not repaid as promised by the borrower, the lender will start to reap the proceedings (Borio, Gambacorta, & Hofmann, 2015). The process will affect the entrepreneur whom will lose the business assets to secure the loan. Depending on the negotiation of the deal, long-term loans take up to five years to pay back (Cohen & Scatigna, 2015). The loans are normally collateralized and guaranteed by entrepreneurs using assets, also depending on the deal negotiated between the parties. All rates and terms are not the same; they vary greatly depending on the lending organization policies financial status and business age. In a lending situation, the collateral is pledged by the entrepreneur to offset the loss in case the borrower defaults the loan. Additionally, when the entrepreneur defaults the loan, the lender takes possession of the asset pledged as collateral and sells it to reclaim the money back. The amount obtained from the sale will be applied to the amount due on the note. If the amount does not meet the amount borrowed by the entrepreneur, the lender may further look to the guarantee for the rest of the balance. This study will highlight the effects of debt financing on the profitability of commercial banks in Australia.

Research question

What is the effect of debt financing on the profitability of commercial banks in Australia?

Research methodologies

Research design

This study will be descriptive in nature hence a census method will be used to investigate the effect of debt financing on the profitability of commercial banks in Australia. It is established that descriptive research is a powerful method of quantitative analysis because it enables the researcher to describe the area of research, collect data and compare the outcomes within a specified period. The process permits collection and use of secondary data resulting to a description of the data in many forms.

Population of the study

Target population refers to the number and type of commercial banks that will be involved in the study. In this case, the study will involve all commercial banks within Australia as at 31^st December 2015. The banks involved should be licensed and registered under the Banking Act (Edirisuriya, Gunasekarage & Dempsey, 2015).

Sample technique

Since the population of the study is not very large census method will be used hence targeting the whole population. The aim of this technique is to ensure that all elements of the population are targeted and their data collected.

Data collection method

The study will use data collected from secondary sources. The data from the banks will be extracted. These will include annual reports and financial statements of the period between 2011 and 2015.

Data analysis

The SPSS software version 17 will be used to analyze the data obtained from the study. The quantitative data obtained will be analyzed using descriptive statistics, regression and metrology including percentages, pie charts, and distribution tables. Additionally, the Pearson Correlation analyses will be used to establish the relationship between the dependent variable bank capital and independent bank profitability. Moreover, a linear regression will be undertaken on independent and dependent variables of the study (Time, 2012).

As established earlier in this paper, tests will be undertaken to determine the relationship and the coefficient of determination (r²). Differences between the commercial banks in different tier levels will be established to find out the strength of the relationship. The panel data obtained from the various sources will allow analysis using the panel data methodology. This process involves the pooling of the collected data on the cross-section of units over various time periods and gives processed results in terms pure time series.

The estimation of debt and profitability is done by use of the regression model as follows;

ROEi,t =β0 + β1DTi.t + β2SDAi.t + β3LDAi.t + β4DAi.t + β5SGi.t + βn dumtn + ηi + εit

Subscripts I and t denote the specific time periods, and the dependent variable ratio of performance is denoted ROE (Muchugia, 2013). Where;

• DT denotes ratios of debt
• DA is the total debt divided by the total capital
• LDA denotes long-term debt divided by the total capital
• SG denotes the size
• SDA denoted short-term debt over the total capital
• ηi denotes individual fixed effect on banks
• εit denotes error term

Gantt chart

Research outcome

The descriptive statistics will indicate the movement of ROE over the duration of the study. The summary will be tabulated on the tables. Additionally, the tables will show average indicators of variables from the financial statement data. The results of the ROE will picture the growth or fall in performance during the period of the study (Cummings & Wright, 2016). Moreover, Return On Equity (ROE) establishes the contribution of net income invested by firms’ shareholders. SDA results will indicate if the Australian firms largely depend on short-term debt to finance their businesses or long-term debts from the financial institutions. The mean score of the ratio of long-term debt to total assets will show the total percentage off the bank assets covered by the long-term debts maintaining that capital structures of the banks have low long-term liabilities. The regression analysis will determine the effect of debt, taking debt ratio, short-term debt, size and long-term debt into account (Taylor, Bogdan & DeVault, 2015).

Relevance of the study

The study will help to give advice to commercial banks on the effect of debt financing on their businesses. The study will serve as a discouragement of having high long-term debts because of their decrease in profitability and their expensive nature. This eventually leads to low business performance.

References

Abdullah, A. M., & Naser, K. (2015). Determinants of Capital Structure of Banking Sector in GCC: An Empirical Investigation. Asian Economic and Financial Review, 5(7), 959-972.

Borio, C. E., Gambacorta, L., & Hofmann, B. (2015). The influence of monetary policy on bank profitability.

Cummings, J. R., & Wright, S. (2016). Effect of Higher Capital Requirements on the Funding Costs of Australian Banks. Australian Economic Review, 49(1), 44-53.

Edirisuriya, P., Gunasekarage, A., & Dempsey, M. (2015). Australian specific bank features and the impact of income diversification on bank performance and risk. Australian Economic Papers, 54(2), 63-87.

Gelman, A., Carlin, J. B., Stern, H. S., & Rubin, D. B. (2014). Bayesian data analysis (Vol. 2). Boca Raton, FL, USA: Chapman & Hall/CRC.

Taylor, S. J., Bogdan, R., & DeVault, M. (2015). Introduction to qualitative research methods: A guidebook and resource. John Wiley & Sons.

Time, C. (2012). Data Collection Methods. 225-249.

Muchugia, L. M. (2013). The Effect of Debt Financing On Firm Profitabilty Of Commercial Banks In Kenya (Doctoral dissertation, University of Nairobi).

4 Define your 4thword or phrase. Provide strengths and weaknesses from literature about the topic. Provide at least 4 references. Analyse your hypothesis about this topic and discuss your conclusion.