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Capital Structure of Czech joint stock companies
[Struktura kapitálu českých akciových společností]

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  • Lucie Poulová

Abstract

This article is aimed at the analysis of capital structure of joint stock companies based in the Czech Republic operating in agriculture, industry and building, using the basic principles and ratios of financial analysis. The levels of debt ratio are judged not only according to industry classification but also according to the type of ownership. In the next step, the relationship between leverage and profitability is closely explored since it is thought to be one of the main determinants. Lastly, the liquidity is analysed as a characteristic of short term financial management. The results show that the level of leverage does not change significantly during the followed period. Considering the resources of financing, the share capital plays dominant role being supplemented by retained earnings, apart from payables bank financing is also very important liability. As far as the capital structure theories are concerned, arguments for validity of both are founded.

Suggested Citation

  • Lucie Poulová, 2017. "Capital Structure of Czech joint stock companies [Struktura kapitálu českých akciových společností]," Český finanční a účetní časopis, Prague University of Economics and Business, vol. 2017(4), pages 25-39.
    • Handle: RePEc:prg:jnlcfu:v:2017:y:2017:i:4:id:503:p:25-39
    DOI: 10.18267/j.cfuc.503
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    References listed on IDEAS

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    1. Patrik Bauer, 2004. "Determinants of Capital Structure: Empirical Evidence from the Czech Republic," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 54(1-2), pages 2-21, January.
    2. Eugene F. Fama, 2002. "Testing Trade-Off and Pecking Order Predictions About Dividends and Debt," The Review of Financial Studies, Society for Financial Studies, vol. 15(1), pages 1-33, March.
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    More about this item

    Keywords

    Capital structure; Joiunt stock companies; Debt ratio; Fixed assets coverage; Return on assets; Liquidity; Kapitálová struktura; Akciové společnosti; Věřitelské riziko; Zlaté bilanční pravidlo; Rentabilita celkových aktiv; Likvidita;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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