The Effect of Golden Ratio-Based Capital Structure on Firm’s Financial Performance

This study aims to apply the golden ratio capital structure of non-financial institutions in France and United Kingdom find effect ratio’s deviation from on financial performance. A is an irrational number with approximate value 1.618. In this paper, was applied develop assumption that firm should use debt at a percentage 61.8% equity 38.2%, which deviates variables. The final sample consisted 150 institution firms 200 U.K. between 2002 2021. addition, general method movement (GMM) chosen estimate variables deviating firms’ results show when uses 38.2% its structure, it can have positive significant impact performance both However, debt-to-equity deviated had negative statistically countries’ TOBQ, EPS, ROA, ROE. Moreover, adoption IFRS positively significantly UK. Generally, managers are encouraged their structure. 61.8%, depending measurement demanded.