Does the capital structure impact the company performance: empirical research of the effect of financing decisions on a company’s profitability? Evidence from the UK Pharmaceutical and biotechnology sector

Bendjazia, Noussayba (2023) Does the capital structure impact the company performance: empirical research of the effect of financing decisions on a company’s profitability? Evidence from the UK Pharmaceutical and biotechnology sector. Masters thesis, University of Wales Trinity Saint David.

[img]
Preview
Text
2626 Bendjazia, N. Does the capital structure (2023).pdf - Accepted Version
Available under License Creative Commons Attribution Non-commercial No Derivatives.

Download (1MB) | Preview

Abstract

Capital structure is among the most significant subject in finance, and managers are tasked with selecting the optimal capital structure option to improve the performance of their organisations. In this thesis, we aim to analyse how capital structure choice affects the company’s performance and value. The research was conducted using a multiple regression model on a sample of 10 pharmaceutical and biotechnological companies listed on the London FTSE all share from 2016 to 2021 for 6 years period to evaluate the type of connection between gearing and profitability. We tested the assumption that leverage positively affects profitability and boosts the value of the company by measuring the gearing with debt to Equity and debt to capital and measuring the profitability with ROE, ROA and Operating Margin. The outcomes of the findings demonstrate the favourable correlation between gearing and a company’s performance in the biotech and pharma industry.

Item Type: Thesis (Masters)
Subjects: H Social Sciences > HB Economic Theory
H Social Sciences > HF Commerce
H Social Sciences > HJ Public Finance
Divisions: Institutes and Academies > Institute of Inner City Learning
Depositing User: Noussayba Bendjazia
Date Deposited: 10 Oct 2023 08:34
Last Modified: 10 Oct 2023 08:34
URI: https://repository.uwtsd.ac.uk/id/eprint/2626

Administrator Actions (login required)

Edit Item - Repository Staff Only Edit Item - Repository Staff Only