To estimate the relationship between capital structure and performance variables I have selected three profitability ratios i.e. net profit margin, return on assets and return on capital employed, whereas for capital structure I am working on DE ratio.
It is a worthwhile project, have you read my works on the topic in hand?
The independent variables for parameter estimation will be capital structure specifics, i.e. debt equity ratio and two control variables as independent variable such as GDP growth rate and interest rate, whereas the performance variables i.e. NPM, ROA and ROCE will be utilized as dependent variables in my model.
The mediating role of short term liabilities and assets between capital structure and financial structure can be checked.
It wd be worthwhile to stratify the sample. As across large, medium, small and sectors the effect of Capital Structure on Financial Performacne may vary. Let me know your model and we can talk over. I have a paper on corporate cash holdings..and also a case study on Infosys share buy back where in one of the key issues is the capital structure of Infosys and how does it impact value?
In my opinion, it would be better if you add your research the coefficients: concetration of owner capital and Concentration of liabilities.
You have a good project. I will like to see how you cater for the effects of tax shieds and bankruptcy cost in firm performance in the case of highly levered firms; how those factors influence firm value and the optimization of capital structure. In the mean time let me see your propose model.
You have a good project. I will like to see how you cater for the effects of tax shieds and bankruptcy cost in firm performance in the case of highly levered firms; how those factors influence firm value and the optimization of capital structure. In the mean time let me see your propose model.
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