Optimization of the capital structure of an agricultural company in the Czech Republic

The topic of optimizing capital structure is very important for a company to work efficiently and reliably. It is important for every company to optimize everything so that they have the highest possible efficiency. Entrepreneurs also try to make this optimization last them as long as possible. Therefore, the aim of this paper is to determine the optimal capital structure of an agricultural company operating in the Czech Republic. The base source of data is the closing data of individual agricultural companies from the Albertina database of Bisnode. More than 9,000 agricultural enterprises operating in the given sector of the national economy in the Czech Republic are recorded in this data set. The calculation of the WACC method and the level of debt of individual agricultural companies are used. Subsequently, the equation for calculating the cost of capital is determined using power regression. Here we also obtain the value of reliability, which in this particular case is not ideal, but still reasonable. A line chart is used to determine the optimal interval for the agricultural company. The optimal debt interval comes out to 20 to 25%, at which the cost of capital is declared to be from 22 to 24%. If agricultural companies had higher or lower debt ratios, it would be inefficient for the enterprise.

Download Full-text

The capital structure of agricultural enterprises in the Visegrad countries

Agricultural Economics (Zemědělská ekonomika) ◽

10.17221/285/2019-agricecon ◽

2020 ◽

Vol 66 (No. 4) ◽

pp. 160-167

Author(s):

Veronika Fenyves ◽

Károly Pető ◽

János Szenderák ◽

Mónika Harangi-Rákos

Keyword(s):

Czech Republic ◽

Capital Structure ◽

Regional Cooperation ◽

Company Size ◽

Member States ◽

The Czech Republic ◽

Agricultural Enterprises ◽

Eu Member States ◽

Visegrád Countries ◽

The Capital Structure

The Visegrad countries – or the V-4 countries: the Czech Republic, Hungary, Poland and Slovakia – is strong regional cooperation of four EU member states in Eastern-Central-Europe aimed at strengthening the positions of the members on both a European and a global level. The aim of this research is to analyse the capital structure of the agricultural and food companies in the V4 Member States. The results show that more profitable companies were less dependent on debt finance, while the fast-growing companies had limited access to the financial market. Company size had a significant effect only in the Czech Republic. Overall, the capital structure seemed to be strongly affected by the farm structure and the relative company size.

Download Full-text

The use of controlling in agricultural enterprises and their competitiveness

Agricultural Economics (Zemědělská ekonomika) ◽

10.17221/19/2014-agricecon ◽

2014 ◽

Vol 60 (No. 7) ◽

pp. 314-322

Author(s):

A. Foltínová ◽

J. Špička

Keyword(s):

Czech Republic ◽

Milk Production ◽

Slovak Republic ◽

Fixed Costs ◽

Gross Margin ◽

The Czech Republic ◽

Agricultural Enterprises ◽

Cost Controlling ◽

Break Even Point ◽

The Cost

The article aims at the evaluation and comparison of the structure of costs linked to the milk production in the Czech Republic and the Slovak Republic. The paper focuses on the potential of the cost controlling in agricultural production. The analysis is based on data from the comparable sample surveys of costs and yields of agricultural commodities carried out by the Institute of Agricultural Economics and Information, Prague, and the Research Institute of Agricultural and Food Economics, Bratislava, in the period 2007–2012. The authors apply the contribution margin calculation and the gross margin calculation. Using target costing, the upper limits of variable and fixed costs are set to reach the break-even point. One of the main finding is that the average costs per litre of milk are by 15.3% higher in Slovakia than in the Czech Republic. It is caused by a significantly lower milk yield in Slovakia. Cost controlling based on the knowledge about the structure of the average costs of milk production can help farmers to better manage their business.  

Download Full-text

Analysis of the structure and cost of capital in mining enterprises

Gospodarka Surowcami Mineralnymi ◽

10.1515/gospo-2017-0001 ◽

2017 ◽

Vol 33 (1) ◽

pp. 77-92 ◽

Cited By ~ 1

Author(s):

Robert Ranosz

Keyword(s):

Capital Structure ◽

Cost Of Capital ◽

Cost Of Debt ◽

Cost Of Equity ◽

Mining Company ◽

Optimal Capital Structure ◽

Mining Companies ◽

Debt Capital ◽

Capital Funding ◽

The Cost

AbstractThis article focuses on the analysis of the structure and cost of capital in mining companies. Proper selection of appropriate levels of equity and debt capital funding of investment has a significant impact on its value. Thus, to maximize the value of the company, the capital structure of the company should be composed to minimize the weighted average cost of capital. T he objective of the article is to present the capital structure of selected Polish and world’s mining companies and estimate their cost of equity and debt capital. In the paper the optimal capital structure for the Polish mining company (KGHM SA) was also estimated. It was assumed that both Polish and world’s mining companies, have no debt exceeding 45% in the financing structure. For the most of analyzed cases, the level of financing with debt capital is in the range between 10% and 35%. T he cost of equity exceeds the cost of debt capital and is in the range between 8% and 20%, while the cost of debt capital reaches the range between 1.9% and 12%. T he analysis of the optimal capital structure determining, performed for the selected mining company, showed that debt capital funding for the company should be in the range between 5.7% and 7.4%.

Download Full-text

CAPITAL STRUCTURE ANALYSIS TO OPTIMIZE THE PROFITABILITY OF MSMES (CASE STUDY ON MSMES HIKMAH IN SIDOARJO, EAST JAVA, INDONESIA)

Journal of World Conference (JWC) ◽

10.29138/prd.v1i2.161 ◽

2019 ◽

Vol 1 (2) ◽

pp. 241-250

Author(s):

Danur Ramadhani ◽

Agus Sukoco ◽

Joko Suyono

Keyword(s):

Capital Structure ◽

Cost Of Capital ◽

Weighted Average ◽

Financial Statements ◽

Business Owners ◽

Optimal Capital Structure ◽

Descriptive Research ◽

The Cost ◽

The Capital Structure

This study aims to analyze the capital structure used to optimize profitability in MSME embroidery shoes. This study uses descriptive research with a qualitative approach. The analytical method is used Weighted Average Cost Of Capital (WACC). The techniques of data collection in this research used interview, observation, documentation and triangulation methods. The data that used are financial transaction records and financial statements issued by the company itself. The results showed that UD. Hikmah used the composition of the capital structure consisting of debt of 20%, 80% own capital with a ROE rate of 170%. Optimization results obtained the optimal capital structure composition on the composition of debt 23% and own capital 77%. By generating a level of profitability that can provide a favorable return for business owners, with the highest calculation of ROE that is equal to 173% and the cost of capital to be borne is Rp.18.238.000 every year.

Download Full-text

Levered-Beta and Cost of Capital Sensitivities: An Experimental Investigation in Capital Structure

Journal of Risk and Financial Management ◽

10.3390/jrfm14040152 ◽

2021 ◽

Vol 14 (4) ◽

pp. 152

Author(s):

Kudret Topyan

Keyword(s):

Capital Structure ◽

Cost Of Capital ◽

Weighted Average ◽

Debt Ratio ◽

Bond Ratings ◽

Optimal Capital Structure ◽

Rating Method ◽

Optimal Capital ◽

The Cost ◽

The Impact

Using US firms with over $5b market cap, this paper tests the impact of levered beta on the firm’s market value and optimal capital structure. Using the synthetic rating method in a recursive model, the paper shows the current and optimal weighted average cost of capital sensitivities as the firm’s market risk measured by beta changes. The paper shows that the change in the value of beta due to alternative leverage levels or other risk factors will alter the cost of capital insignificantly and has no impact on the optimal capital structure due to those firms’ extra-strong bond ratings. As a side-benefit of the synthetic rating method, one may also observe the market-level variables’ impacts on the cost of capital computations and the optimal debt ratio. The paper uses Disney Corporation to show how the synthetic rating methodology helps to disclose the sensitivities of hypothetical alternative leverages.

Download Full-text

Methods for Estimating Avoidable Costs of Excessive Alcohol Consumption

International Journal of Environmental Research and Public Health ◽

10.3390/ijerph18094964 ◽

2021 ◽

Vol 18 (9) ◽

pp. 4964

Author(s):

Beata Gavurova ◽

Miriama Tarhanicova

Keyword(s):

Czech Republic ◽

Alcohol Consumption ◽

Data Availability ◽

Excessive Alcohol Consumption ◽

Public Authorities ◽

The Czech Republic ◽

Cost Of Disease ◽

Lost Productivity ◽

Excessive Alcohol ◽

The Cost

Background: Alcohol is a risk factor with serious consequences for society and individuals. This study aims to present methods and approaches that might be used to estimate the costs related to excessive alcohol consumption. It emphasizes the need for general methods and approaches that are easily applicable, because the level of digitalization and data availability vary across regions. The lack of data makes many methods inapplicable and useless. The ease of applicability will help to make cost-of-illness studies and their results comparable globally. Methods: This study is based on data from the Czech Republic in 2017. Drinking alcohol results in costs of healthcare, social care, law enforcement, and administrative costs of public authorities. To quantify the cost of drinking in the Czech Republic, the top-down approach, bottom-up approach, human capital approach and attributable fractions were used. Results: In 2017, the cost related to alcohol was estimated at 0.66% of the national GDP. Lost productivity represented 54.45% of total cost related to alcohol. All cost related to alcohol is considered to be avoidable. Conclusions: The methods and approaches applied to estimate the cost of disease or any other health issue should be generalized regarding the availability of data and specifics of provided services to people who are addicted or have any kind of disability.

Download Full-text

Confirming Anomalies

Review of Pacific Basin Financial Markets and Policies ◽

10.1142/s0219091521500247 ◽

2021 ◽

pp. 2150024

Author(s):

Peter Chinloy ◽

Matthew Imes

Keyword(s):

Capital Structure ◽

Stock Returns ◽

Cost Of Capital ◽

Simultaneous Equations ◽

Second Stage ◽

Predicted Values ◽

The Cost ◽

Over Time ◽

Identification Strategy

A procedure confirms whether a return-factor correlation is anomalous or results from endogenous simultaneous-equations bias. The identification strategy sorts the cost of capital components for instruments. In the first stage, the initially found factors are regressed on cost instruments. In the second stage, a confirmed anomaly has predicted value significant in returns and exogenous. Taxes, depreciation and capital structure are strong instruments, affecting 1980–2017 quarterly U.S. stock returns. Size, value and profitability decisions are significant in instruments. Returns increase in fitted profits, but not small size. Actual and predicted values have weaker correlation with returns over time.

Download Full-text