IMPACT OF CAPITAL STRUCTURE ON BUSINESS EFFICIENCY OF PETROLEUM ENTERPRISES

Abstract

This paper assesses the impact of capital structure on performance of Petroleum enterprises listed on stock market. The research uses panel data of 30 companies in five years. ROE and ROA are dependent variables in the model, independent variables in the model are the ratio of debt to total assets (TDA), short-term debt to total assets (SDA) and the ratio of debt to equity (TDE). Regression models with random effects are used to estimate the relationship between capital structure with performance of these enterprises. The results show that there is a correlated relationship between the ratio of debt to equity and performance as measured by ROE.