scholarly journals Enterprise capital - Definition, theory and determinants of the structure

2021 ◽  
Vol 9 (6) ◽  
pp. 29-33
Author(s):  
Marcin Walczak
Keyword(s):  
Capital Structure ◽  
Balance Sheet ◽  
Optimal Structure ◽  
Main Research ◽  
Common Definition ◽  
Risk Appetite ◽  
Universal Approach ◽  
Definition Of ◽  
Relationship Of ◽  
The Capital Structure

Purpose of the study: The main goal of the article is to define the company's capital, the concept of which in the literature is insignificant and broad. The subject of the research is also the characteristics of the capital structure and the factors that determine it. Methodology: The main research method was a critical review of the literature in the field of shaping the capital structure of enterprises, also in the perspective of the evolution of the theory of the optimal capital structure and the factors determining it. Main findings: The most common definition of capital describes this concept as a source of financing for the activities of an enterprise, and therefore equates it with the balance sheet concept of liabilities. The sources of origin of funds financing business activities forces the managers to search for their optimal structure ensuring the proper relationship between the planned profit and the acceptable level of risk. The literature presents many theories of capital structure and factors shaping it. When shaping the share of equity and borrowed capital in the total of liabilities, one should take into account the business sector of the enterprise, its environment and the risk appetite of the managers. Application of the study: The presented attempt to define the company's capital is in line with the considerations on this subject so far and aims to standardize this concept in the literature. The cross-section of the theory of capital structure allows for a historical approach to this issue and confirmation of the multidimensionality of the presented issues. The presented factors shaping the capital structure of enterprises specify the areas on which managers should focus when looking for an optimal relationship of equity and foreign capital. Originality/Novelty of the study: The issue of defining capital and its optimal structure is not new in the literature. However, it requires permanent analysis, which is conditioned by the volatility of macroeconomic and microeconomic conditions. Difficulties in a universal approach to this subject also force detailed research in specific industries and economic conditions.

Factors influencing the structure of the Russian companies' capital

2020 ◽  
Vol 26 (7) ◽  
pp. 1647-1660
Author(s):  
O.N. Likhacheva ◽  
A.S. Belikevich
Keyword(s):  
Correlation Analysis ◽  
Capital Structure ◽  
Systems Approach ◽  
Empirical Studies ◽  
Factors Influencing ◽  
Oil Contracts ◽  
Economic Landscape ◽  
Relationship Of ◽  
Trade Wars ◽  
The Capital Structure

Subject. In the uncertain market environment, the optimal structure of capital is getting more important because it influences the competitiveness of a firm, its financial sustainability and solvency and, consequently, a success. Herein we dwell upon the hypothesis presuming the existence of capital structure determinants. Objectives. We review empirical studies on the subject, analyze determinants of the Russian companies’ capital structure. Methods. The study is based on the systems approach and methods of statistical analysis. Results. It is necessary to monitor how capital is shaped and formed. We investigated proceedings on factors influencing the capital structure and discovered relevant hypotheses, carrying out the correlation analysis of such factors. Conclusions and Relevance. It is especially important to examine factors influencing the capital structure, and find the appropriate format for the economy struggling through the crisis. The coronavirus pandemic unavoidably reshapes the global economic landscape, which has already been under the pressure of deglobalization processes (trade wars, repudiation of oil contracts). The correlation analysis did not reveal any relationship of the variables in question (the company’s age, ROE, ROA, MOEX, key rate, GDP, PPI) and the capital structure. Further research should be devoted to other factors and consider the unreasonableness and psychological background of managers’ behavior who make decisions concerning the capital structure.

scholarly journals Is There Any Relation between Intellectual Capital and the Capital Structure of a Company? The Case of Polish Listed Companies

e-Finanse ◽  
2015 ◽  
Vol 11 (4) ◽  
pp. 23-33
Author(s):  
Monika Bolek ◽  
Katerina Lyroudi
Keyword(s):  
Capital Structure ◽  
Intellectual Capital ◽  
Intangible Assets ◽  
Stock Exchange ◽  
Equity Capital ◽  
Warsaw Stock Exchange ◽  
Relationship Of ◽  
The Relationship ◽  
A Company ◽  
The Capital Structure

Abstract This study investigates the relationship of the intellectual capital of a company (proxied by its intangible assets), with leverage and equity and capital structure. Our empirical results indicate that there is a negative relation between the intellectual capital (intangible assets) of a company and its leverage based on the Warsaw Stock Exchange main market and NewConnect alternative market. Moreover, the equity capital is found positively related to the level of intangibles in each of the two markets. These results support the thesis that intellectual capital (intangible assets) influences the capital structure of a company.

scholarly journals FORMATION OF THE CAPITAL STRUCTURE OF THE ENTERPRISE

2021 ◽  
Author(s):  
Dmytro Nesterenko ◽  
Olena Parkhomenko
Keyword(s):  
Capital Structure ◽  
Financial Resources ◽  
Financial Strategy ◽  
Implementation Phase ◽  
Optimization Stage ◽  
External Sources ◽  
Definition Of ◽  
Fierce Competition ◽  
Business Financing ◽  
The Capital Structure

The article reveals the role of the process of attracting sources of funding for activities. Depending on the source of financing and the method of attracting them, three main financing mechanisms are identified: counterparty, credit and capital market. The peculiarities and advantages of some ways of attracting financing are identified and analyzed. Also, the mechanism of planning of attraction of financial resources considering a real financial position of the enterprise is formed. It is proved that in conditions of fierce competition the company's growth rate has a key impact on the factors of the company's continued existence in the market. The formation of a base for attracting investment in advance provides a stable and affordable source of funds for further expansion. An algorithm for forming the capital structure considering the current financial and economic condition of the enterprise has been developed. Opportunities for the company's growth are directly related to the availability of financial resources that can be obtained from various sources. The decision to use certain sources influences time and financial costs for obtaining and securing borrowed capital and for the diversification of government entities over the company, which to some extent pursue their own goals. Therefore, when building a financial strategy of the enterprise it is important to rationally and pragmatically approach the definition of ways to use financial resources and combine different sources of business financing. The effectiveness of the entire financial strategy of the enterprise largely depends on how correctly and in detail the choice of capital structure was worked out. Using the company's management of the proposed algorithm for the formation of capital structure optimization stage, as well as in the implementation phase of expansion with external sources funded, will allow the company to better attract and use the attracted financial resources without losing the investment attractiveness for future creditors and investors and not losing trust from other financially interested stakeholders.

scholarly journals BALANCE SHEET EFFECT SEBAGAI PENENTU DETERMINAN STRUKTUR MODAL ENAM BURSA EFEK PADA NEGARA-NEGARA ASEAN

2012 ◽  
Vol 12 (3) ◽  
pp. 103
Author(s):  
Zainal Abidin Sahabuddin ◽  
Stevanus Adree Cipto Setiawan
Keyword(s):  
Capital Structure ◽  
Firm Growth ◽  
Balance Sheet ◽  
The Philippines ◽  
The State ◽  
External Factors ◽  
Tax Shield ◽  
Debt Tax Shield ◽  
Internal And External Factors ◽  
The Capital Structure

<span>Balance sheet effect is due to the relationship between the external and internal<br /><span>factors. The purpose of this study is to obtain the result: firm size, firm growth, financial <span>risk, asset structure, non debt tax shield on capital structure; influence of internal <span>factors, the influence of internal and external factors of the company’s capital structure. <span>The research was conducted in countries of ASEAN<span>6<span>, namely Indonesia, Malaysia, <span>Philippines, Singapore, Thailand and Vietnam. Unit of analysis of this study is that corporations have huge capitalization in 2008 until 2011. Data analysis using regression method Simultaneous and panels. The results showed: the size of the company has a<br />positive and significant impact on the capital structure for ASEAN6 countries; growth has a negative and significant impact on the capital structure in the country of Malaysia, the Philippines, and Thailand; financial risk has a negative and significant impact on the capital structure in Singapore , asset structure has a positive and significant impact on the capital structure for Singapore, Malaysia, and the Philippines; non-debt tax shield and a significant negative effect on the capital structure for the State of Indonesia<br />and Malaysia, the interest rate has no significant effect on the capital structure in cASEAN 6 countries; foreign exchange rate has a positive and significant effect for the Philippines; rate of inflation on capital structure has a negative and significant impact to the state of Indonesia, the Philippines, and Vietnam while Malaysia, Thailand and Singapore have a positive and significant impact; economic growth on the capital structure has a negative and significant impact to the state of Indonesia, the Philippines, and Vietnam while Negara Malaysia, Thailand and Singapore have a positive and significant impact; contained internal influence on the capital structure for six ASEAN countries; There are internal and external influences on capital structure for ASEAN6<br />countries.<br />Keywords: Balance Sheet Effect, Internal and external factors, and capital structure.<br /></span></span></span></span></span></span></span></span>

scholarly journals Capital structure, corporate governance, and the effect of Sarbanes-Oxley

2019 ◽  
Vol 17 (1) ◽  
pp. 166-172 ◽  
Author(s):  
Mark Bertus ◽  
John S. Jahera Jr. ◽  
Keven Yost
Keyword(s):  
Corporate Governance ◽  
Capital Structure ◽  
Agency Theory ◽  
Governance Structure ◽  
Corporate Governance Structure ◽  
Agency Relationship ◽  
Legislative Action ◽  
Sarbanes Oxley ◽  
Relationship Of ◽  
The Capital Structure

The Sarbanes-Oxley Act represented a major legislative action designed to increase transparency and accountability in U.S. corporations. Within the context of agency theory and corporate governance, the expectation is that the enactment of Sarbanes-Oxley impacted the agency relationship of firms and hence affected the corporate governance structure. With these changes, the question arises as to the capital structure decisions of corporations which have previously been shown to be related to agency measures and corporate governance. It is the objective of this research to examine the capital structure of U.S. firms as they relate to corporate governance measures and to determine the effect, if any, of Sarbanes-Oxley.

scholarly journals Empirical Analysis of Capital Structure Determinants of Russian Oil and Gas Companies

2018 ◽  
Vol 13 (5) ◽  
pp. 80-109 ◽  
Keyword(s):  
Capital Structure ◽  
Oil And Gas ◽  
Structure Form ◽  
Financing Decisions ◽  
Western Market ◽  
Definition Of ◽  
Oil And Gas Companies ◽  
A Company ◽  
The Capital Structure

The theory of capital structure, developed in the last century, determines the factors on the basis of which the management of a given company must form its system of financing decisions in order to optimize the capital structure and, accordingly, to increase the company’s value. Despite the fact that the data of the theory are based on the fundamental concepts of corporate finance, such as the present value of future revenues, information asymmetry, and profitability, the tenets of different theories contradict each other. These ambiguous results concerning the influence of various factors on a company’s capital structure form the motivation and problem of this study. Decisions on financing a company have an impact on its value, and therefore its financing method is a very significant factor for investors, directors and other stakeholders, which makes the study of target capital structure determinants particularly relevant. The topic of the capital structure of Russian companies has barely been addressed in existing studies, since most often they are based on the Western market. Thus, the identification of regularities in the system of decisions on capital structure through the case study of oil and gas companies in Russia, as well as the definition of theories that explain these patterns, are of particular interest, motivated by the ambiguity of previous studies, and the lack of such studies on Russian companies. Identifying the existing patterns affecting decisions on capital structure and the theoretical framework that describes them will enable companies to develop their own system of capital structure decisions.

scholarly journals Black Spots’ in Capital Structure Studies: The Case of Non-Existing Debt

2015 ◽  
Vol 9 (2) ◽  
pp. 5-23
Author(s):  
Eugene Nivorozhkin
Keyword(s):  
Capital Structure ◽  
Global Financial Crisis ◽  
Dynamic Properties ◽  
Balance Sheet ◽  
Secondary Markets ◽  
East European ◽  
Black Spots ◽  
Structure Choice ◽  
Capital Structure Choice ◽  
The Capital Structure

Evgeny Mikhailovich Nivorozhkin - School of Slavic and East European Studies, University College of London. This paper looks at the issue of dynamic properties of capital structure choice and the persistencein the capital structure choice. This study focuses on what can be characterized as “black spots” in the existing studies - the selection issue, which is manifested in the fact that a nontrivial number of companies occasionally do not have any debt on their balance sheet. The problem of zero debt is akin to truncated and censored regression models, which are useful when the dependent variable is observed in some ranges but not in others. We find strong evidence that the results of the target adjustment studies of capital structure, which use fitted values of debt ratios, can be potentially biased due to failure to correct for censoring due to zero-leverage observations. This paper also looks at the issue of dynamic properties of capital structure choice and the persistence in the capital structure choice and examines the effect of the 2008 global financial crisis on Russian firms’ capital structure choice. Despite the significant differences in fitted values, the models used in this study yield similar qualitative results – the factors that were identified in the literature to exhibit the most robust correlation with leverage work similarly across models and typically in line with expectations. The effect of higher tangibility of assets is a noteworthy exception which, similar to previous studies, seem to indicate that underdeveloped and/or inefficientlegal systems together with thin and illiquid secondary markets for firms’ assets tend to limit the importance of tangible assets as collateral in emerging markets like Russia.

scholarly journals Does Capital Structure Influence Company Profitability?

2017 ◽  
Vol 12 (3) ◽  
pp. 50-62
Author(s):  
Mihaela Herciu ◽  
Claudia Ogrean
Keyword(s):  
Capital Structure ◽  
Balance Sheet ◽  
Optimal Structure ◽  
Return On Assets ◽  
Return On Equity ◽  
Sheet Structure ◽  
Equity Ratio

Abstract Every company has a different structure of balance sheet. Some of the companies have more liabilities than equity. Considering the industry or debt-to-equity ratio, the balance sheet structure affects the company profitability measured by DuPont system. The main objective of the paper is to analyze the structure of balance sheet and to identify some optimal levels in order to increase company profitability. The DuPont returns like ROA (return on assets) and ROE (return on equity) will be used to measure the company profitability, while the debt-to-equity ratio will be used as a measure (reflection) of capital structure. The samples consist on the most profitable non-financial companies ranked in Fortune Global 500. The companies will be grouped in clusters (based on industry or debt-to-equity ratio) in order to identify the signification of the correlation between the profit and the balance sheet structure. The main results of the paper refer to the company profitability that can be increased by using an optimal structure of liabilities and equity.

scholarly journals RELATIONSHIP OF CONCEPTS LEGAL PROTECTION AND PROTECTION OF RIGHTS IN SCIENTIFIC DISCOURSE

2021 ◽  
pp. 8-11
Author(s):  
Ya. Babych ◽  
Keyword(s):  
Legal Protection ◽  
Legal Regulation ◽  
Point Of View ◽  
Theoretical Research ◽  
Scientific Schools ◽  
Legal Nature ◽  
Universal Approach ◽  
The Subject ◽  
Definition Of ◽  
Relationship Of

The article addresses the understanding of the legal categories "legal protection" and "protection of rights". The legal nature and content of these definitions are analyzed. Particular attention is paid to the characteristics of these definitions in scientific international and domestic doctrines. The positions of five different scientific schools on the understanding of these concepts are considered. The first cohort of scientists adheres to the views according to which such definitions are analyzed as interaction of whole and part. The second group of scholars identifies the concepts of "legal protection" and "protection of rights". The third point of view on the specified theoretical problems, consists of the delimitation of the outlined definitions. The fourth constellation of scholars reveals the analyzed categories through the prism of individual branches of law, taking into account the subject and method of legal regulation of each area. The universal approach distinguishes between the concepts of "legal protection" and "protection of rights" and considers them as different, but at the same time absolutely full-fledged legal categories. It is substantiated that the latter has normative and applied significance and is effectively used by the international community both at the doctrinal and legislative levels. On the basis of the conducted theoretical research the independent scientific conclusions and judgments on the analyzed subjects are offered, in particular the author's definition of definition "legal protection" is given. In addition, the main features inherent in the above categories are highlighted. Particular attention is paid to the need of highlighting the preventive component of the concept of "legal protection", which is particularly important within this category.

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