Analysis of the impact of capital structure on business performance
Analysis of the impact of capital structure on business performance

Author(s): Jarmila Horvathova, Martina Mokrisova
Subject(s): Business Economy / Management, Accounting - Business Administration
Published by: Masarykova univerzita nakladatelství
Keywords: business performance; capital structure; indicators; model;
Summary/Abstract: The aim of the paper was to analyse the impact of company's capital structure on its performance. To achieve goal, the data of Slovak businesses were used. An input analysis of the capital structure of selected sector was carried out in order to generalize and elaborate conclusions aimed at the capital structure of analysed businesses. Selected indicators of capital structure were calculated to analyse the relationships between these indicators and business performance. The results of the correlation analysis were complemented by examining the impact of selected independent variables on business performance applying regression analysis and principal component analysis. On the basis of the findings, capital structure model was formulated to quantify the impact of changes in capital structure on business performance. The contribution of the paper is the identification of capital structure indicators that affect business performance as well as the construction of capital structure model. The article as well as the research, which is the basis for paper elaboration, is the result of professional public interest focused on the finding whether the capital structure is the determinant of business performance.

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