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Profitability And Sources Of General Manufacturers In 2009-2011

Author

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  • Herczeg Adrienn

    (University of Debrecen Centre of Agricultural Sciences, Faculty of Agricultural Economics and Rural Development)

Abstract

Analysis of capital structure of corporations is a key issue of economics and the effect of its fluctuation can be observed on several fields of the life of corporations. It wields influence shall I say the competitiveness of the sector, property status or financial and profitability situation of corporations, effectiveness of management, market value of the company as well as the expectable output rate of equity for owners. My empirical analysis is based on data containing 5 manufacturer enterprises from Hungary between 2009 and 2011. To substantiate my aims, during my research in the scope of a technical literature processing I reviewed the most important parameters of the fluctuation of financing, fund- and capital structure, especially considering their agricultural references. I cared especially the followings: financing and the system of the sector supports, thus reviewing: root causes of lack of capital in agrarian sector, connection between capital structure and profitability of the sector. I demonstrated capital structure theories considered to be the most important also in a technical literature processing, emphasizing their practical materialization, thus proving the fact that up to this day there is no existence of an accepted ruling theoretical trend for defining development of an optimal capital structure. With regression calculating I searched the volume of influence of chosen indices of capital structure on financial and profit situation of corporations, in addition I studied which variant of those that take a part in development of capital structure, should be in functional relation with profitability indices. I try to assess the reasons of the changes in the structure of resources of enterprises in order to find the determinants effecting the capital structure. Furthermore, I determine the capital structure with that profit running could be achieved in the most effective way. As a result of my review I can state, that the capital structure proportions take serious effect on the fluctuation of profitability and I defined a proportion of foreign capital and own capital which if reached or exceeded, may lead to operation producing deficit.

Suggested Citation

  • Herczeg Adrienn, 2013. "Profitability And Sources Of General Manufacturers In 2009-2011," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 1(2), pages 382-389, December.
    • Handle: RePEc:ora:journl:v:1:y:2013:i:2:p:382-389
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    References listed on IDEAS

    as
    1. Malcolm Baker & Jeffrey Wurgler, 2002. "Market Timing and Capital Structure," Journal of Finance, American Finance Association, vol. 57(1), pages 1-32, February.
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    More about this item

    Keywords

    manufacturers; capital structure; liability; profitability;
    All these keywords.

    JEL classification:

    • M40 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - General

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