Evaluating Capital Structure Dynamics During Financial Crises: Insights from Shariah Compliant Companies Using Python Pandas

Abstract

Shariah Compliant Companies (SCC) have gained significant prominence and preference among investors recently. Several key factors influence investor decisions to commit their funds to these companies, including profitability, leverage, and capital structure. Analyzing a company’s capital structure allows stakeholders and potential investors to gauge and predict its financial health. However, the capital structures of SCCs differ from those of non-Shariah compliant companies (NSCCs), financial institutions, and small and medium enterprises (SMEs) due to their distinct characteristics and features. This paper explores the impact of capital structure during periods of financial crisis. It focuses on two main aspects: first, the study will analyze SCCs from five Southeast Asian countries as a sample, and second, it will employ a novel methodology using Python Pandas programming for data analysis. Additionally, the research seeks to determine the differences in capital structures between SCCs and NSCCs, along with the underlying reasons for these differences. The data for this study will be sourced from DataStream, published by Thomson Reuters Eikon, covering the period from 2005 to 2012. The results demonstrate that the capital structures of SCCs and NSCCs are markedly different. Furthermore, during financial crises, SCCs exhibit greater resilience, attributed to their unique features and financial benchmarks.