The Study on the Impacts of Capital Structure on Corporate Financial Performance in Food Manufacturing and Hotel Industries: Evidence from SMEs in U.K.
Abstract
 This study aims to investigate the influence of capital structure on financial performance of small and medium sizes enterprises (SMEs) in food manufacturing and hotel industries in U.K. Data are collected from Financial Analysis Made Easy (FAME) database and least square regression analysis is applied to examine the impacts. Research results show that capital structure has a negative effect on financial performance in food manufacturing industry in U.K. However, mixed results are found in hotel industry. Capital structure have a negative impact on return on assets (ROA), while Capital structure affects return on equity (ROE) positively. Therefore, financial managers should not blindly employ debt without regard to industrial characteristics.
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