Investigating the Impact of Capital Structure on Financial Performance of Companies Listed on the Tehran Stock Exchange
Authors
Zahra Mohammadi Asl
Department of Accounting, Rasht Branch, Islamic Azad University, Rasht, Gilan Province, Iran
Abstract
This research examines the impact of capital structure on the financial performance of companies listed on the Tehran Stock Exchange from 2018 to 2022. Using panel data regression models, the study investigates how debt and equity ratios, along with firm size, influence financial performance measured by Return on Assets (ROA). The results indicate that a higher debt ratio negatively affects financial performance, while a higher equity ratio and larger firm size have positive effects. The study employs various diagnostic tests to ensure the robustness of the findings and offers practical recommendations for optimizing capital structure. These insights are valuable for investors, managers, and policymakers seeking to enhance financial performance and stability.
