**4. Empirical Findings**

#### *4.1. Summary Statistics and Correlations*

Table 3 presents the descriptive analysis of the variables. The indebtedness rates of the companies are neither very small nor very high, to signal an alarming situation. The average of long-term debt is 35%, while the average of short-term debt is 21%, so the proportion of long-term debt is higher than that of short-term debt. The maximum values, respectively the minimum, the median and the standard deviation are presented in the table for statistical inferences.


**Table 3.** Descriptive statistics.

Source: Author's own work.

The rate of financial return is somewhere at 10% and is negatively correlated with all debt rates, the strongest correlation being with the long-term debt rate. Price to earnings ratio and price to book value are also negatively correlated with debt ratios. Debt can create artificial increases in price to book value. Price to earnings ratio, as well as price to book value, does not help investors in comparisons regarding companies' debts to make certain decisions, although debt has a major impact on company performance, illustrated by the financial leverage effect, that can be both positive or negative.

The average duration of the stock rotation is 66 days, meaning that the products stay about 2 months in stock until they are sold. According to Table 4 there is no significant association between the working capital and the total indebtedness rate, respectively on the long term, but there is a negative correlation between this and the short-term indebtedness rate. There is also a negative correlation between current liquidity and debt ratios, most companies having optimal liquidity, if we look at the median that is around 1. The technology sector requires a longer period of time to use the products, thus a value less than 1 should not be a negative signal.


**Table 4.** Correlation of variables.

The size of the company is negatively correlated with the indebtedness rates, as well as the tangibility, which from a statistical point of view, shows that the companies have fixed assets with an average proportion of 30%. The sales growth rate is positively correlated with the total indebtedness rate, respectively on the long term and negative with the short term one. Although the technology sector is a sector in continuous development, registering very high growths, the median shows that the growth rate is at the level of 10%. The median of the variable working capital fund suggests that most companies have a financial balance, managing to finance their fixed assets from permanent capital.

The corporate governance dummy variables have the median 1, regarding the duality of the CEO it can be said that the CEO is not the chairman of the board of directors, regarding the presence of the three committees, remuneration, audit and nomination, we can also affirm in this is the case that most companies have these committees in their structure, with the average number of board members being around 8. These are negatively correlated with debt ratios.

Macroeconomic indicators such as interest rate, inflation rate and market size are positively correlated with debt ratios, only the gross domestic product per capita is negatively correlated with them.
