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

Author

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  • Jana Steklá

    (Czech University of Life Sciences Prague)

  • Marta Gryčová

    (Czech University of Life Sciences Prague)

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.

Suggested Citation

  • Jana Steklá & Marta Gryčová, 2015. "The Relationship between Capital Structure and Profitability of the Limited Liability Companies," Acta Universitatis Bohemiae Meridionalis, University of South Bohemia in Ceske Budejovice, Faculty of Economics, vol. 18(2), pages 32-41.
    • Handle: RePEc:boh:actaub:v:18:y:2015:i:2:p:32-41
    DOI: 10.1515/acta-2016-0003
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    More about this item

    Keywords

    Capital structure; profitability; limited liability companies; statistics; correlation;
    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
    • Q14 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Finance

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