Economic control proportion suggests the partnership anywhere between borrowed funding and you can guarantee regarding the whole time of the enterprise

The partnership within coefficient away from financial power and monetary results is a positive relationships

The leverage ratio (LR) keeps a confident affect ROEwhen the fresh financial leverage ratio grows because of the 1 equipment, new security ratio grows by 0.045 units. From the YГјzde 100 Гјcretsiz filipino tanД±Еџma siteleri model suggests that in the event the proportion of one’s mediocre overall possessions and you can collateral increases or even the economic autonomy regarding organizations decreases, the brand new monetary performance regarding companies increases.

This new long-identity house ratio (LAR) enjoys an optimistic reference to the fresh new ROE. In the event the ratio off enough time-identity possessions increases from the 1 equipment, the ROE grows from the 0.225 units. The new enough time-title asset proportion suggests how much cash new long-title stable resource is utilized by guarantee and you can enough time-identity loans to finance its much time-term property. Throughout the model signifies that, the art of businesses to cover enough time-term assets with secure long-name money expands, the fresh economic overall performance out-of enterprises grows.

Your debt-to-property proportion (DR) has a confident affect the newest ROE. We come across that when the latest proportion out-of financial obligation to property develops by step one device, this new return to guarantee increases by the 0.047 tools. The debt so you can house ratio reveals exactly how much of one’s organization’s assets come from borrowing from the bank. People borrowing quicker demonstrates you to the monetary independency is right. Regarding design, the brand new reduced the new enterprise was borrowing from the bank or the high its financial flexibility would be, the greater the economic performance of your own enterprise are.

The fresh notice-investment proportion (E/C), economic control ratio (LR), long-identity property ratio (LAR) and financial obligation-to-Resource ratio (DR) independent details the features influences towards the ROE. Thus, we come across the resource design has an effect on brand new economic abilities off businesses.

The business size (SIZE), the newest ratio regarding fixed property (FAR) and also the rate of growth (GROWTH) handle variables most of the provides positive relationship in order to ROE. In particular, the development Rate (GROWTH) provides the large quantity of dictate into regression coefficient, + 0.058 for example if Rate of growth develops from the step 1 device, new come back on collateral develops by the 0.058 systems. If the funds of your own adopting the year exceeds the new funds of the earlier season, it may be know one to merchandise in the business try turned shorter, the latest demand of your marketplace for items try bigger than the early in the day year, the business pattern out of organizations is perfect.

5.4. 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).

According to outcome of regression studies, the connection amongst the coefficient of notice-resource while the financial overall performance of your own industry enterprises ‘s the reverse relationship. Which negative dating means whenever reducing the coefficient of care about-investment or reducing the proportion off equity taken into account the complete investment, brand new monetary show of your own agency expands. This end is similar to the studies from Trinh and you can Nguyen (2013).

Which relationships means by the improving the power ratio otherwise reducing the typical security and you can improving the mediocre total assets, the brand new monetary efficiency of the agency increases. The outcome of your own analysis resemble that from Berger and Patti (2006), Chu, Nguyen, and you can Ngo (2015).