The assessment of financial performance in firms using capital structure indexes – Case study of a local beverage firm-

Abstract

This study aims to illustrate how capital structure indexes could be used to analyze the financial situation of firms and assess their financial performance and how to compose the optimal mix of capital structure, finding that the establishment of an optimal capital structure (debt and equity) by reducing the weighted average cost of capital and achieving a risk-return balance allows the improvement of financial performance.

     By investigating the case of a non - alcoholic beverage firm, we found that it has a good long-term financing strategy that has enabled it to improve its financial performance and gradually increase its market value during the years of study.