How Capital Structure Shapes Firm Performance:Testing The Trade-Off Industrial Jordanian Firms Listed on The ASE

This study aims to examine the impact of capital structure on the financial performance of ‎Jordanian industrial companies listed on the Amman Stock Exchange (ASE). A descriptive ‎analytical approach was employed, using a sample of 33 Jordanian industrial companies listed on ‎the ASE. The Statistical Package for the Social Sciences (SPSS) was used to test the effects of ‎the independent variables on financial performance.‎ The results reveal a statistically significant negative relationship between total assets (TA) and ‎financial performance (FP) at the 1% level. Conversely, a statistically significant positive ‎relationship at the 1% level was found between interest rate protection (IRP), asset turnover ratio ‎‎(ATOR), current ratio (CR), earnings per share (EPS), and financial performance (FP). However, ‎there was no statistically significant relationship between market-to-book value (MBV) and ‎financial performance (FP) when measured by the return on assets (ROA). Furthermore, a ‎statistically significant negative relationship at the 1% level was observed between MBV and FP. ‎On the other hand, no statistically significant differences were identified between TA, IRP, ‎ATOR, CR, EPS, and FP when ROA measured FP‎.