Examine Relationsheep between Measures of Financial Leverage (Capital Structure) and Measure of Performance

Evaluating the performance of companies is one of the most important issues for managers, investors and other Stakeholders and the results of research, is a base of many internal and external decision making. In current research, financial leverage criteria and two criteria of performance include return on assets (ROA) and market value of equity plus book value of debt over book value of total assets (Tobin Q) are applied. Aim of this research is to answer this question about the relationship between the capital structure and the companie's performance. Data sample included 71 listed companies in Tehran Stock Exchange over a period of five years from 2008 to 2012. In this study, using multiple regression and correlation coefficients, analysis of data was performed. K-S is used in order to test normality and eventually Fischer applied to test regression. Finally, following results were obtained: There is a significant relationship among variables TDTE, LTDTA and TDTC with criteria of measuring ROA; whereas, there was not significant relationship between independent variable with Tobin Q.