Capital Structure and Firm Performance of Listed Non-Financial Companies in Bangladesh

Abstract

This study investigates the firm performance on capital structure for the listed non-financial companies in Dhaka Stock Exchange (DSE) for the enter period of 2008-2011 under judgment sampling method. Specific objective of this research is to examine the relationship between the attribute of capital structure and the firm performance. Multiple regression models are used to estimate the influence of capital structure on firm performance. Capital structure is measured by the Debt Ratio, Debt to Equity Ratio, Current Debt Ratio, Proprietary of Equity Ratio and Current assets proprietors' funds Ratio and firm performance as measured by return on assets (ROA) and return on sales (ROS). The results obtained from regression models show that Debt Ratio, Debt Equity Ratio and Proprietary of Equity Ratio are negatively and significant relationship with return on asset (ROA) and return on sales (ROS). Beside the control variable total asset is positively and significant relationship with return on asset (ROA) and return on sales (ROS).

Keywords: Capital structure, firm performance, DSE, Non-financial Companies