The Relationship between Capital Structure and Financial Performance in the Companies Listed in Abu Dhabi Securities Exchange: Evidences from United Arab Emirates

Anas Ali Al-Qudah

Abstract


This study aimed to examine the relationship between capital structure and financial performance in the firms listed in Abu Dhabi Securities Exchange (ADX), Profitability Ratios were used to express of the financial performance, and the Debt Ratio was used to express the Capital Structure. A random sample from the companies listed in ADX was taken to achieve the objective this study, it consisted of 48% of all companies in this financial market, and the study period extended from 2008 to 2015. The researcher used Statistical Package for the Social Sciences (SPSS), to analyze the study hypotheses, using ANOVA, model summery and coefficients for the study variables. And the results of this study showed that is positive relationship between the capital structure (Debt Ratio) and the Financial Performance (Profitability: Return on Assets) in ADX. And there is a negative relationship when we used the Return on Equity to express for the Profitability with the capital structure. The overall study results showed that there is significant relationship between capital structure and financial Performance in the companies listed in Abu Dhabi Securities Exchange, and the model of this study able to explanation almost 31% from changes happened in the profitability due to the capital structure. This result was consistent with some previous studies.


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DOI: https://doi.org/10.5539/res.v9n2p1

Copyright (c) 2017 Anas Ali Al-Qudah

License URL: http://creativecommons.org/licenses/by/4.0

Review of European Studies   ISSN 1918-7173 (Print)   ISSN 1918-7181 (Online)

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