The Explanatory Factors of Capital Structure: Empirical Study of Textile Sector Companies in Portugal

In the current scenario of increasing competition, it is crucial for managers to define an optimal capital structure for their companies. This is a crucial factor for financial performance, growth, meeting objectives and maximization of company value. Although there are several studies on this subject, there is still no consensus. This study analyses the variables that potentially explain the capital structure of Portuguese textile companies between 2010 and 2022. It also analyses whether there is a conditional relationship with the age and size of the company. The results show that return on equity, liquidity and company growth have a negative and statistically significant relationship with capital structure. Asset structure and the effective income tax rate do not explain capital structure. The variables liquidity, effective income tax rate and company growth show a conditional relationship depending on the age and size of the company. The importance of this study transcends borders, providing valuable insights for managers, investors, researchers and governments, in the search for the best capital structure that maximization company value.