Advances in Economics, Management and Political Sciences
- The Open Access Proceedings Series for Conferences
Proceedings of the 7th International Conference on Economic Management and Green Development
Series Vol. 40 , 10 November 2023
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Impact of Capital Structure on the Operating Performance of Listed Companies in the Pharmaceutical Industry
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Abstract
The objective of this paper is to explore the correlation between the capital structure and op-erating performance of selected leading pharmaceutical companies listed on the stock ex-change during the COVID-19 pandemic. To investigate how diverse capital structures influ-ence corporate performance, this study collects, calculates, and compares pertinent financial data, including leverage ratios, performance indicators, and cash flow, for these firms over three years. The findings show that companies with lower debt ratios are more likely to achieve stable earnings and cash flows, as well as to achieve higher performance indicators to some extent, compared to companies with higher debt ratios. Thus, capital structure has an impact on a company's operating performance. At the same time, a reasonable capital structure optimization can enhance a company's operating performance and mitigate opera-tional risks. It is recommended that listed companies in the pharmaceutical industry should focus on optimizing their capital structure to reduce financial risks and financing costs and to improve cash flow levels in order to achieve stable improvements in operating perfor-mance while ensuring sound operations and management. Investors should also focus on the capital structure of companies when making investment decisions and select those compa-nies with a sound capital structure for investment. These findings and recommendations provide suggestions and directions for the pharmaceutical industry to optimize its capital structure and improve its operating performance.
Keywords
capital structure, pharmaceutical industry, operating performance, financial risk, investor
References
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Data Availability
The datasets used and/or analyzed during the current study will be available from the authors upon reasonable request.
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- Volume Title
- Proceedings of the 7th International Conference on Economic Management and Green Development
- ISBN (Print)
- 978-1-83558-101-8
- ISBN (Online)
- 978-1-83558-102-5
- Published Date
- 10 November 2023
- Series
- Advances in Economics, Management and Political Sciences
- ISSN (Print)
- 2754-1169
- ISSN (Online)
- 2754-1177
- DOI
- 10.54254/2754-1169/40/20231995
- Copyright
- 10 November 2023
- Open Access
- This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited