Capital Structure And Operating Performance Studies - Empirical Analysis Of The Shenzhen A-share Listed Companies

Modern theories of capital structure indicated that the change of capital structure will influence the company's performance in an effective stock market. Companies can benefit more from liabilities financing than from equity financing. Capital structure of listed companies has testified this. This paper is designed to find out whether the capital structure of sample companies affects their performances. We also want to check the view that capital structure and firm performance are positively related in a definitely range. Maybe it can reflect the efficiency of our stock market.This paper choose companies of manufacturing, wholesale & retail, technology and logistics listed in Shenzhen stock market for research to eliminate the influence from industry classification and make performance of variable companies more comparable.This paper uses liability-asset ratio and long-term debt ratio to describe the capital structure of sample companies; ROE and EVA per net asset are used to described the perfomance of sample companies. Through the statistical analysis of the above 4 industries we found that performance of sample companies during 2001 to 2003 has no relation with its capital structure.Firstly the thesis introduce the relevant theories and research documents. Secondly the statiscal theory is used to testify whether the capital structure is related to the performance of listed companies. Finanly the thesis analyze the conclusion through the cost of capital. The statistical analysis between liability-asset ratio and WACC of listed companies show that capital structure does not affect its performance.