The Impact of Debt-To-Equity Ratio and Return on Assets of ‎Thai-Listed Firms: The Moderating Role of Firm Size

  • Authors

    • Parichat Vongpatchim Faculty of Interdisciplinary Studies, Khon Kaen University, Thailand
    https://doi.org/10.14419/n3byzq37

    Received date: June 12, 2025

    Accepted date: July 16, 2025

    Published date: July 22, 2025

  • Capital Structure; Debt-to-Equity Ratio; Return on Assets; Firm Size; Thai-Listed Firms

  • Abstract

    This study examines the effect of capital structure—specifically the debt-to-equity (D/E) ratio—on the profitability of firms listed on the ‎Stock Exchange of Thailand (SET). Profitability is measured using Return on Assets (ROA). Utilizing secondary data from 585 firms over ‎the period 2014–2024, this research employs a quantitative approach, where financial data were collected from publicly available annual ‎reports and financial statements. The study further investigates the moderating role of firm size in the leverage profitability relation‎ship. Fixed effects regression analysis is used to control for unobserved heterogeneity across firms and time. The empirical findings ‎reveal a statistically significant negative relationship between the D/E ratio and ROA. Moreover, firm size positively moderates this relation‎ship, suggesting that larger firms are better positioned to manage the risks associated with higher financial leverage.‎

    The study contributes to the existing body of knowledge by providing updated empirical evidence from an emerging market context. It offers practical insights for financial managers, investors, and policymakers regarding the optimal capital structure and its performance impli‎cations. By integrating firm size as a moderating factor, thereby enhancing the understanding of capital structure dynamics in the Thai capital ‎market‎.

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    Vongpatchim, P. (2025). The Impact of Debt-To-Equity Ratio and Return on Assets of ‎Thai-Listed Firms: The Moderating Role of Firm Size. International Journal of Accounting and Economics Studies, 12(3), 194-200. https://doi.org/10.14419/n3byzq37