Research on Capital Structure and Investment Value of Supermarket Industry

Research Article
Open access

Research on Capital Structure and Investment Value of Supermarket Industry

Haocheng Huang 1* , Zecheng Liu 2 , Huan Zhao 3
  • 1 Pennsylvania State University    
  • 2 Jiangsu Tianyi High School    
  • 3 Pennsylvania State University    
  • *corresponding author hkh5252@psu.edu
Published on 10 November 2023 | https://doi.org/10.54254/2754-1169/41/20232030
AEMPS Vol.41
ISSN (Print): 2754-1177
ISSN (Online): 2754-1169
ISBN (Print): 978-1-83558-103-2
ISBN (Online): 978-1-83558-104-9

Abstract

This paper focuses on researching the capital structure and investment value of the supermarket industry, specifically examining the impact of epidemiological events on value investment within this sector. The objective is to explore the factors that influence capital structure decisions and their implications for investment value. The analysis employs the Weighted Average Cost of Capital (WACC) method to evaluate the relationship between capital structure and investment performance in the context of the supermarket industry. The study aims to investigate the influence of epidemiological events, such as COVID-19, on the capital structure decisions of supermarket companies and their subsequent effects on investment value. The research considers factors such as the size and maturity of the companies, risk profiles, regulatory environments, and cost of capital considerations to assess their impact on capital structure choices. By utilizing the WACC method, A study of supermarket investment value and capital structure decisions is presented in this paper. The WACC approach allows for a comprehensive evaluation of the cost of debt and equity financing, incorporating factors such as interest rates, tax implications, and market conditions.

Keywords:

supermarket, investment, COVID-19

Huang,H.;Liu,Z.;Zhao,H. (2023). Research on Capital Structure and Investment Value of Supermarket Industry. Advances in Economics, Management and Political Sciences,41,34-40.
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References

[1]. Muda, I., Indra, N., & Dharsuky, A. (2021). The community Walmart uncertainty model: A review of ownership and capital structure aspects. Uncertain Supply Chain Management, 9(1), 49-56.

[2]. Herciu, M., & Ogrean, C. (2017). Does capital structure influence company profitability? Studies in Business and Economics, 12(3), 50-62.

[3]. Clayton, M. J. (2009). Debt, investment, and product market competition: A note on the limited liability effect. Journal of Banking & Finance, 33(4), 694-700.

[4]. Matsa, D. A. (2011). Running on empty? Financial leverage and product quality in the supermarket industry. American Economic Journal: Microeconomics, 3(1), 137-173.

[5]. Amat, O., & Manini, R. (2017). Credit scoring for the supermarket and retailing industry: Analysis and application proposal.

[6]. Kabuye, F., Kato, J., Akugizibwe, I., & Bugambiro, N. (2019). Internal control systems, working capital management and financial performance of supermarkets. Cogent Business & Management, 6(1), 1573524.

[7]. Malshe, A., & Agarwal, M. K. (2015). From finance to marketing: The impact of financial leverage on customer satisfaction. Journal of Marketing, 79(5), 21-38.

[8]. Chevalier, J. A. (1995). Capital structure and product-market competition: Empirical evidence from the supermarket industry. The American Economic Review, 415-435.

[9]. Momin, A. (2022, July 12). Retail Industry Analysis: A $28 Trillion Market. Pestleanalysis.com. https://pestleanalysis.com/retail-industry-analysis/.

[10]. Zisoudis, Nikolaos & Karelakis, Christos & George, Theodossiou & Loizou, Efstratios. (2020). Financial Analysis of Major Retail Chains within a Turbulent Economic Environment. Studies in Business and Economics. 15. 208-222. 10.2478/sbe-2020-0054.


Cite this article

Huang,H.;Liu,Z.;Zhao,H. (2023). Research on Capital Structure and Investment Value of Supermarket Industry. Advances in Economics, Management and Political Sciences,41,34-40.

Data availability

The datasets used and/or analyzed during the current study will be available from the authors upon reasonable request.

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About volume

Volume title: Proceedings of the 7th International Conference on Economic Management and Green Development

ISBN:978-1-83558-103-2(Print) / 978-1-83558-104-9(Online)
Editor:Canh Thien Dang
Conference website: https://www.icemgd.org/
Conference date: 6 August 2023
Series: Advances in Economics, Management and Political Sciences
Volume number: Vol.41
ISSN:2754-1169(Print) / 2754-1177(Online)

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References

[1]. Muda, I., Indra, N., & Dharsuky, A. (2021). The community Walmart uncertainty model: A review of ownership and capital structure aspects. Uncertain Supply Chain Management, 9(1), 49-56.

[2]. Herciu, M., & Ogrean, C. (2017). Does capital structure influence company profitability? Studies in Business and Economics, 12(3), 50-62.

[3]. Clayton, M. J. (2009). Debt, investment, and product market competition: A note on the limited liability effect. Journal of Banking & Finance, 33(4), 694-700.

[4]. Matsa, D. A. (2011). Running on empty? Financial leverage and product quality in the supermarket industry. American Economic Journal: Microeconomics, 3(1), 137-173.

[5]. Amat, O., & Manini, R. (2017). Credit scoring for the supermarket and retailing industry: Analysis and application proposal.

[6]. Kabuye, F., Kato, J., Akugizibwe, I., & Bugambiro, N. (2019). Internal control systems, working capital management and financial performance of supermarkets. Cogent Business & Management, 6(1), 1573524.

[7]. Malshe, A., & Agarwal, M. K. (2015). From finance to marketing: The impact of financial leverage on customer satisfaction. Journal of Marketing, 79(5), 21-38.

[8]. Chevalier, J. A. (1995). Capital structure and product-market competition: Empirical evidence from the supermarket industry. The American Economic Review, 415-435.

[9]. Momin, A. (2022, July 12). Retail Industry Analysis: A $28 Trillion Market. Pestleanalysis.com. https://pestleanalysis.com/retail-industry-analysis/.

[10]. Zisoudis, Nikolaos & Karelakis, Christos & George, Theodossiou & Loizou, Efstratios. (2020). Financial Analysis of Major Retail Chains within a Turbulent Economic Environment. Studies in Business and Economics. 15. 208-222. 10.2478/sbe-2020-0054.