Financial leverage proportion suggests the connection ranging from lent money and you may security in the entire time of the corporation

The connection between the coefficient away from monetary influence and you will economic performance is a positive matchmaking

New control proportion (LR) features a positive impact on ROEwhen the newest monetary leverage ratio develops of the step 1 product, new equity proportion grows by the 0.045 products. In the model shows that in the event the ratio of your own mediocre total property and collateral grows and/or financial liberty from organizations reduces, the latest financial show regarding people expands.

The newest much time-label house proportion (LAR) enjoys a confident relationship with brand new ROE. In the event that proportion away from enough time-identity possessions develops by step 1 equipment, the newest ROE expands by the 0.225 products. The latest much time-label resource proportion shows how much cash the fresh new enough time-identity stable funding is used by the security and you may a lot of time-name personal debt to finance their long-label possessions. Throughout the model implies that, the skill of people to cover long-name assets having steady a lot of time-name investment grows, the fresh financial results from enterprises grows.

Your debt-to-possessions ratio (DR) provides an optimistic effect on the brand new ROE. We come across whenever new proportion off loans to help you property increases because of the step one product, the new return to equity develops by the 0.047 gadgets. Your debt in order to house ratio suggests how much of one’s organization’s possessions are from credit. Enterprises credit quicker shows one to their financial independence excellent. On the model, the faster new enterprise is borrowing and/or large the economic independency could be, the higher the financial results of organization are.

Brand new worry about-financing ratio (E/C), monetary power proportion (LR), long-name property proportion (LAR) and personal debt-to-Resource proportion (DR) independent details all the provides impacts to the ROE. Hence, we see that the money structure possess an impact on this new financial efficiency out-of businesses.

The business dimensions (SIZE), the brand new proportion off fixed assets (FAR) additionally the growth rate (GROWTH) manage details most web of the possess self-confident matchmaking so you can ROE. Specifically, the development Rate (GROWTH) gets the higher number of determine toward regression coefficient, + 0.058 and therefore if Growth rate grows by the step 1 product, the fresh new return toward collateral expands because of the 0.058 gadgets. If the cash of your pursuing the seasons exceeds the newest cash of your own earlier season, it could be know you to products on the market are turned less, the fresh consult of marketplace for activities try bigger than the fresh prior seasons, the company development out of enterprises is best.

5.4. Dialogue

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 outcome of regression studies, the connection involving the coefficient away from worry about-financial support plus the economic efficiency of your own market organizations is the reverse matchmaking. This negative relationship implies that when reducing the coefficient out of self-resource otherwise decreasing the ratio off collateral taken into account the entire investment, the fresh monetary show of the enterprise increases. This achievement is similar to the studies off Trinh and you may Nguyen (2013).

That it relationship means that from the increasing the control ratio otherwise reducing the average equity and you may raising the average full assets, new monetary overall performance of one’s firm grows. The results of your analysis act like those of Berger and you can Patti (2006), Chu, Nguyen, and you will Ngo (2015).