How Capital Structure Shapes Firm Performance:Testing The Trade-Off Industrial Jordanian Firms Listed on The ASE
Year: 2025
Type: article
Abstract: This study aims to examine the impact of capital structure on the financial performance of Jordanian industrial companies listed on the Amman Stock Exchange (ASE). A descriptive analytical approach was employed, using a sample of 33 Jordanian industrial companies listed on the ASE. The Statistical Package for the Social Sciences (SPSS) was used to test the effects of the independent variables on financial performance. The results reveal a statistically significant negative relationship between total assets (TA) and financial performance (FP) at the 1% level. Conversely, a statistically significant positive relationship at the 1% level was found between interest rate protection (IRP), asset turnover ratio (ATOR), current ratio (CR), earnings per share (EPS), and financial performance (FP). However, there was no statistically significant relationship between market-to-book value (MBV) and financial performance (FP) when measured by the return on assets (ROA). Furthermore, a statistically significant negative relationship at the 1% level was observed between MBV and FP. On the other hand, no statistically significant differences were identified between TA, IRP, ATOR, CR, EPS, and FP when ROA measured FP.
DOI: 10.14419/cwfy8w02
Author: Hilal Rabayah
Institution: Arab American University
Subfield: Accounting
Domain: Social Sciences
Open Access status: bronze
OpenAlex ID: W7116701710
FWCI:
Cites:
Cited by:
Related to: