Theoretical review of analysis of capital structure and firms performances

Abstract

This paper examines the theoretical review of analysis of capital structure decisions of enterprises in an emerging economy of Ukraine. The capital structure of a firm consists of a particular combination of debt and equity issues to relieve potential pressures on its long-term financing. This paper examined the steps undertaken for the analysis of financial accounting information such as capital structure ratios and financial performance indicators from financial report of an enterprise with the aim of discovering major determinants of its financial structure and also highlighted issues such as financial distress, bankruptcy threats, solvency problem, risk of default due to unstable economic and political situations as possible dangers that may plague the enterprises, whose capital structure may lean towards debt financing.