Evaluating the effect of capital structure modeling on business performance

This thesis aimed to explore the influence that capital structure modeling has on Business Performance to come up with a conclusion. The data were gathred based on the inputs from twelve Turkish companies. The analysis of the collected data were then utilized to achieve the aim. In the first part of the study, the concept of capital structure was explained, and the theories were addressed, namely, Irrelevance Theory, Trade-Off Theory (TOT), and their types. Also, the determinants of all capital structures and the firm-specific and structural models of the capital structure were identified. The second part of the study was the practical part, the data of Turkish firms was used to accomplish the goal. An input analysis of the capital structure of the selected sector were undertaken in order to generalize and elaborate conclusions concerning the capital structure of the companies analyzed. Where the main problem is the identification of capital structure indicators that affect business performance. Performance was assessed using the Economic Value Added (EVA) metric, a correlation matrix, the Cohen scale, and the SPSS software. We developed a few capital structure measures to investigate the connections between these indicators and the organization's overall performance. These outcomes of the correlation research showed significant improvements by using regression analysis and Principal Component Analysis to investigate the effect of some unrelated elements on the overall success of the company. As a result, we recommend developing a new one that is prepared to take on the risks associated with both options. The outcomes of this study will serve as the foundation for more research, including collecting a more relevant data and another set of analysis.