The relationship between the coefficient off economic leverage and economic overall performance try a positive relationships

The fresh new leverage proportion (LR) provides an optimistic influence on ROEwhen the new economic power ratio increases of the 1 product, the fresh guarantee ratio increases because of the 0.045 gadgets. Throughout the model shows that when the proportion of mediocre complete possessions and you will equity expands or perhaps the financial autonomy away from enterprises reduces, the fresh economic abilities away from enterprises expands.

This new much time-name investment proportion (LAR) features a positive experience of the newest ROE. When the proportion from a lot of time-name property develops by step 1 unit, the fresh ROE grows by 0.225 devices. The brand new a lot of time-title asset ratio shows exactly how much the long-identity secure financial support can be used of the security and you will enough time-name personal debt to invest in its enough time-identity property. Regarding design suggests that, the ability of enterprises to cover much time-identity possessions having steady long-identity financing expands, the newest economic results away from organizations develops.

The debt-to-possessions proportion (DR) provides a confident effect on the newest ROE. We come across that if the proportion from financial real Valencia brides obligation to help you possessions increases by step 1 product, the fresh new go back to equity increases of the 0.047 units. Your debt to asset ratio suggests exactly how much of your businesses assets are from borrowing from the bank. Businesses borrowing from the bank less proves that the monetary independency is great. Regarding the model, the latest smaller this new agency try credit or the highest its financial flexibility was, the better the new financial abilities of corporation are.

Brand new notice-financing ratio (E/C), economic power ratio (LR), long-identity property proportion (LAR) and you can financial obligation-to-Investment ratio (DR) independent details every have affects to your ROE. For this reason, we see the financing framework have an effect on the financial show from people.

The company dimensions (SIZE), the fresh new proportion away from repaired assets (FAR) together with growth rate (GROWTH) control variables all of the has self-confident dating so you can ROE. Particularly, the development Rate (GROWTH) gets the highest quantity of dictate on regression coefficient, + 0.058 meaning that if the Rate of growth grows from the step one tool, the latest go back on the security grows of the 0.058 gadgets. In the event the revenue of your after the year exceeds the fresh new money of your past year, it may be knew that merchandise in the business is became reduced, the latest consult of one’s market for items try bigger than the brand new earlier season, the firm pattern out-of businesses is best.

5.cuatro. Discussion

The purpose of the study is to understand the impact of capital structure on the financial performance of listed pharmaceutical enterprises on Vietnam’s stock market. According to the results of correlation analysis and regression analysis, rejecting the H₀ hypothesis, accepting the H₁ hypothesis, means that there is a relationship between capital structure and financial performance of listed pharmaceutical enterprises in Vietnam stock exchange. The results of the study are similar to those of Krishnan and Moyer (1997), Arbor (2005), Zeitun, Tian, and Keen (2007), Gill, Biger, and Mathur (2011), Doan (2014), and Le (2017).

With respect to the results of regression analysis, the relationship involving the coefficient out-of worry about-funding additionally the financial efficiency of your own markets enterprises ‘s the opposite matchmaking. It negative matchmaking ensures that whenever decreasing the coefficient of care about-investment or reducing the ratio from security accounted for the financing, the latest economic abilities of your business expands. So it conclusion is much like the research of Trinh and you will Nguyen (2013).

That it dating implies that because of the increasing the power ratio or cutting the typical equity and you can enhancing the mediocre overall property, new economic abilities of enterprise increases. The results of your own study resemble those of Berger and you may Patti (2006), Chu, Nguyen, and you will Ngo (2015).