Capital structure and solvency of Vietnamese companies

Abstract

The paper studies the relationship between capital structure and solvency of the non-financial companies in Vietnam. The research sample includes 230 listed companies in the period 2010 - 2013, the data is from the audited financial statements. Regression analysis showed that the level of debt in the capital structure has significant negative impact on short-term debt solvency and interest coverage. The study results suggest the solvency be a condition for deciding the capital structure of the companies.