Empirical Research On The Relationship Between Capital Structure And The Profitability Of Listed Firms

Enterprises can maximize economic benefits by engaging in market economic activities.Not only maintaining their own operation and development,they can also effectively promote the growth of national economy by closely combining with public institutions and administrative units and make full use of themselves.A successful enterprise can not only create value,but also drive the economic development of an industry or a region to a certain extent.The simplest and most direct way to judge whether an enterprise is valuable to our society and national economy is to check its profitability.In recent years,the amount of domestic consumption was improved by increase of disposable income and increase of the consuming willingness,which are consistent with the improvement of gross domestic product and the sustainable development of economy,the tertiary industry has successfully stepped into the core zone from the fringe of China's national economy.Therefore,been the mainstay of the tertiary industry,retail industry also ushered in an unprecedented developing opportunity.From an empirical perspective,this thesis selects domestic listed retail enterprises as the object of the empirical research,hoping to obtain an empirical conclusion with guiding significance for improving corporate profitability by studying the relationship between capital structure and profitability of such enterprises.The financial data of 86 enterprises in the business chain sub-sector of the industry sector in 2017 was selected to be the research object.Various statistical analysis methods were used in this research,including multiple variables linear regression method,principal component analysis,and factor analysis.By using principal component analysis(PCA),three principal components were extracted from the selected five profitability indexes,then the variance contribution rates of the principal component were used as the right to calculate the weighted average,Finally,the comprehensive profitability index of the enterprise is obtained.Using multiple variables linear regression method,this study set up a linear relationship between capital structure and profitability.In this linear model,dependent variable was comprehensive profitability index,and independent variables are varieties of capital structures,the enterprise scale,the capacity of management and growth ability of the enterprise.Through the analysis,it is concluded that all kinds of capital structures have influence on profitability of enterprise,and all the influences are not the same.Debt ratio has the most powerful influence in profitability,debt to tangible asset has second-rate influence,long-term debt to capital ratio has third influence,and long-term debt to equity ratio owns the lowest influence in profitability.