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The Relationship between Capital Structure and Profitability of the Limited Liability Companies

The Relationship between Capital Structure and Profitability of the Limited Liability Companies Abstract Capital structure is very important, especially the decision which concern with this problem, because the profitability of a company is directly affected by such decision. The successful choice and use of capital is one of the key components of the enterprises financial strategy. This means that it is the vital to pay attention and proper care capital structure. The aim of this paper is to investigate the relationship between capital structure and profitability of the limited liability companies from an agricultural sector in the Czech Republic over the past six year period from 2008 to 2013. Data was obtained and processed from the database of enterprises of Albertina and was analyzed by using descriptive statistics, i.e. mean, median, variation range, standard deviation, coefficient of variation, skewness, kurtosis, and correlation analysis to find out the association between the variables. The results of this paper describe a small negative correlation between the debt ratios and profitability ratios. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Acta Universitatis Bohemiae Meridionalis de Gruyter

The Relationship between Capital Structure and Profitability of the Limited Liability Companies

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Publisher
de Gruyter
Copyright
Copyright © 2015 by the
ISSN
2336-4297
eISSN
2336-4297
DOI
10.1515/acta-2016-0003
Publisher site
See Article on Publisher Site

Abstract

Abstract Capital structure is very important, especially the decision which concern with this problem, because the profitability of a company is directly affected by such decision. The successful choice and use of capital is one of the key components of the enterprises financial strategy. This means that it is the vital to pay attention and proper care capital structure. The aim of this paper is to investigate the relationship between capital structure and profitability of the limited liability companies from an agricultural sector in the Czech Republic over the past six year period from 2008 to 2013. Data was obtained and processed from the database of enterprises of Albertina and was analyzed by using descriptive statistics, i.e. mean, median, variation range, standard deviation, coefficient of variation, skewness, kurtosis, and correlation analysis to find out the association between the variables. The results of this paper describe a small negative correlation between the debt ratios and profitability ratios.

Journal

Acta Universitatis Bohemiae Meridionalis – de Gruyter

Published: Dec 1, 2015

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