A Study of the Impact of Capital Structure on the Firm Performance

Tingxuan Zhang

doi:10.54097/jtdzg478

Authors

Tingxuan Zhang

DOI:

https://doi.org/10.54097/jtdzg478

Keywords:

Capital Structure, Firm Performance, Different Industries, Different Markets.

Abstract

This paper analyses the impact of different capital structures on the financial performance of firms, starting from the capital structures of different firms. Firstly, it starts from the MM capital structure theory and analyses the realistic limitations of its existence. Then, it analyses the characteristics of the capital structure of enterprises in different industries, and compares and analyses the characteristics of the capital structure of different enterprises in heavy-asset industries, light-asset industries, and scientific and technological and public medical categories, and the reasons for their differences, respectively. Then, the characteristics of the capital structure of enterprises in different regions are analysed, and the characteristics of the capital structure of different enterprises in developing and developed countries and within developing countries and the reasons for their differences are compared and analysed respectively. Finally, it is concluded that capital structure is an important but also complex decision for a company, there is no overall optimal conclusion, different industries and different markets will have a certain impact on it, and the capital structure is different at different stages of development, which needs to be constantly adjusted according to the different development of the company.

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