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In developed countries, Capital structure is one of the most important concepts related to finance that is used by most of the business firms to evaluate their business performance. Capital is a set of liabilities that are currently in the business. All these liabilities come in two categories: equity and debt. The proportion of both significantly affects the financial performance of companies. According to Pratheep kanth (2011), capital structure can be termed as a means that is usually used to finance business operations.

CAPITAL STRUCTURE AS DETERMINANT OF FINANCIAL PERFORMANCE OF COMMERCIAL BANKS IN ETHIOPIA (A CASE STUDY ON PRIVATE BANKS IN ETHIOPIA)