Empirical Studies in Financial Accounting

Abstract Choosing between debt financing and capital financing influenced by internal and external factors impacting companies' capital structure. The main goal of determining capital structure is to recognize the combination of financial resources to maximize stockholders' wealth. Because of the qualitative aspects of capital formation in high-tech companies, there has been huge investments in these companies which doesn’t seem to be a rational behavior in the investment community; Therefore it seems necessary to compare high-tech and traditional company’s capital structure.
In this paper, in order to investigate the capital structure of high-tech and traditional companies and also comparing linear and non-linear models, companies are divided into two groups, high-tech and traditional companies. We collected year-company data of 378 companies during 2004- 2009 for the analysis using multiple regression and artificial neural network.
The findings of this study indicate that liability ratio and financial leverage decisions in two above mentioned companies are different. The capital structure criterion in both industries has significantly different and non-linear models of capital structure in comparison with linear ones are more powerful in prediction

Abstract Empirical studies of capital structure are fraught with difficulties. As mentioned by Harris and Raviv (1991), the interpretation of results of these studies should consider the difficulties involved in measuring both leverage and the explanatory variables. In other words, resulting from empirical studies of capital structure is "definitional-dependent of leverage" and on the other hand, may be affected by the imperfect measurement of the study made by researcher. In this study, ten measures have been used to define financial leverage for the first time (in Iran).  The results show firstly, some firm characteristics are associated with financial leverage. Level of leverage is negatively correlated with profitability and growth opportunities, and positively related to size variable, but tangibility is not related to  leverage;  secondly,  the  results  are  affected  by  definition  of leverage. In other words, the results of the first part are affected by ten measures of financial leverage measurement. Especially, the decompositional analysis shows current debt and its components have an important effect on the results of the study. This finding challenges traditional measurements of leverage.  

Abstract The firms' capital structure plays an important role in investment decision making. The main goal of this paper is review the relationship between capital structure and profitability measures in Tehran Stock Exchange. Therefore 189 sample firms that their required data for a nine years period (1375-1383) was available are selected. Then the relation between profitability ratios and capital structure is reviewed. Four industries of sample statistic, that had more firms, are selected to examine the hypotheses too. The panel data regression is used to examine the hypotheses. Signification of the models is examined by T and F statistics.

Abstract In this study the effect of "Financial Leverage (FL) on Earning Response Coefficient (ERC)" for accepted members of Tehran Stock Exchange is considered. The purpose is to find out whether or not the investors, analysts, etc. consider the capital structure and leverages of the firms when reacting to the good and bad news caused by revealing the accounting in formation. Financial   Leverage   measurement   approaches   are   of   two divisions as follows: I)  Income Statement 2) Balance sheet In this research balance sheet approach i s used. In this approach, two definitions have been considered for leverage. I)  Debit/ assets Ratio 2) Debit I equity Ratio Both definitions are used here. Studying the only research hypotheses  using   the  regression   analysis  during  2000-20004 indicates  that  in  the  first  leverage  definition  there  is  a  reverse relationship between  FL & ERC in the whole sample and  in high leverage and  in  the second  definition  i n  high  leverage. However in the first definition in low leverage and i n the second one in the whole sample and in low leverage there's no considerable relationship between ERC and FL.  

Abstract Most of the financial managers believe that financial leverage is one of the most important leverage concepts. This concept has a key position in capital structure. Management capital structure of a firm is a combination of debt and equity holders. A firm which has not any debt is a firm without debt in structure. As capital structure in more firms is consist of debt and equity holders, financial managers are very sensitive and minute about loan delivery and its effects. But there is a question that how much debt should a firm use? Is there any marked criterion for debt measure in the firm capital structure? In most countries which have efficient capital market, leverage ratios provide for different conditions and industries, so the firms in determination of capital structure, investors in securities and banks and financial institutions when investment and giving loan to a firm consider these standards. But there aren’t any standards in our country. This research analysis the relationship between the firms’ financial leverage and the industry type, the firm's size, business risk and operation leverage and their relationship. We search for some information for the financial managers use to make the best  financial decision. On the other hand, one of the conditions of liberty investment market is giving correct, clear and subtle information to the whole people. In this market, the   security   price   indicates   al I   information   about those   securities.  In Tehran stock exchange, using this information is not common for investors to use it as a criterion to measure a firm financial risk and desirability of dividend. If  one  may  determine  the  relationship  of  four above factors with the firm  financial  leverage, not only we can use of this information  in  stock  market, but  also  in  determination  of  validity  of  a firm  for banks. In this research, we considered the financial information which is related to 88 firms i n two periods.  After the information analysis  using  different  statistical  methods,  it  was  distinguished  that  the hypothesis  of direct relationship  between  financial  leverage and  financial measure, is confirmed  only  in some of the  industries, but the other three hypotheses in two period are rejected.