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An Analysis on the Capital Structure of Family Firms

Author

Listed:
  • Aclan Omağ

    (Marmara University)

  • Altan Masun

    (Marmara University)

Abstract

Capital structure is an element of financial decisions and is shaped by various factors. The liability part of the balance sheet helps us to understand how the capital structure is formed. Family firms are defined as businesses where different resources are used together with their unique structures. There may be different financing preferences when there is growth over time in family businesses which benefit more from equity capital in their establishment and early periods. In this study, in order to determine the capital structure of a sample family business, the balance sheets for the 2017-2019 period were examined by vertical analysis method. The results obtained showed that the company’s capital structure was dominated by short-term debts in the period under review. Other sources utilized by the company were equity and long term liabilities, respectively.

Suggested Citation

  • Aclan Omağ & Altan Masun, 2022. "An Analysis on the Capital Structure of Family Firms," Journal of Finance Letters (Maliye ve Finans Yazıları), Maliye ve Finans Yazıları Yayıncılık Ltd. Şti., vol. 37(118), pages 221-238, October.
    • Handle: RePEc:acc:malfin:v:37:y:2022:i:118:p:221-238
    DOI: https://doi.org/10.33203/mfy.1148560
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    More about this item

    Keywords

    Family Firms; Capital Structure; Vertical Analysis;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • M49 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Other

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