Impact of Capital Structure on Firm's Financial Performance: Evidence from United Kingdom

The purpose of this paper is to examine empirically the impact of capital structure on financial performance of United Kingdom (UK) firms' during the period from 2006 to 2015. The investigation is performed using data of 739 UK very large and large listed companies on London Stock Exchange. The study uses four performance measures, including return on equity - ROE, return on assets - ROA, Tobin's Q and earnings per share EPS as dependent variables. The two capital structure ratios, namely long-term liabilities and short-term liabilities as well as growth rate of total assets are applied as independent variables. Size