Relationship between the performance and capital structure in companies

The capital structure, which is an important concept for companies to survive in a competitive environment, is the whole of the resources of companies. Every company invests in a variety of assets in order to maintain and grow its business, and based on principles of balance sheets, they must have provided the same amount of resources for these investments. In general, these resources are divided into debt or equity. Debt, also referred to as foreign resources, is the resource that the firm has provided for a certain period at a certain cost. Debt is divided into short-term debt and long-term debt. Short-term debts; refers to liabilities that can be paid up to a maximum of one year according to the financial statement principles. Long-term debt is the amount paid by companies for more than a year. Equity consists of items such as the resources provided by the company partners and their savings from the past profits of the company. In short, the capital structure is expressed as short and long term debt and the amount of equity used by the enterprises in investment financing. There is a very important relationship between the capital structure and performance of companies. Performance of companies is expressed as a measure of how effectively and efficiently the resources of the enterprises are used. Studies show that there is a meaningful relationship between capital structure and performance of the enterprises. The purpose of this research is to examine whether there is a relation between capital structure and firm performance in enterprises. For this purpose, firstly the concept and elements of capital structure are emphasized. In the following, the concept of performance is explained, performance measurement is emphasized and data envelopment analysis used for performance measurement is explained. In the implementation part of this study, the 2010-2014 periods of 61 manufacturing companies operating in the manufacturing sector have been examined. Multiple regression analysis has been conducted to determine the relationship between capital structure and performance. As the performance criterion, which is the dependent variable, we use the input-focused activity value obtained from the data envelopment analysis. As the independent variable, the " Total Actuarial Ratio of Short Term Liabilities " and " Share of Tangible Fixed Assets in Total Assets " values which express the capital structure were used. As a result of the analyzes made, a linear relationship has been found in the same direction with the share of tangible fixed assets in total assets, which is inversely between the activity value and the total rate of short-term liabilities for 3 years. That is, when the total rate of short-term debt increases, the efficiency values are positive, and when the share of tangible fixed assets within the total assets is increased, the efficiency values are affected negatively. In general, it can be said that there is a statistically significant relationship between capital structure and performance of companies operating in the manufacturing sector.