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Profitability - Capital Structure Trade Off: Case Of Publicly Romanian Companies

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  • Botoc Claudiu

    (West University of TimiÅŸoara, Faculty of Economics and Business Administration, Finance Department TimiÅŸoara, Romania)

Abstract

There is an increasing number of empirical works that test what drives firm profitability, since it is an objective and at the same time a frame of how a company is performing. The main aim of this paper is to test capital structure, noncurrent assets ratio and tax rate as determinants for profitability, with capital structure as main focus. Using a sample of 62 publicly Romanian for period 2001-2011 and panel data model the results suggest that financial statement variables considered are significant in gauging profitability. It was concluded that there is evidence for pecking order theory and firms with large amounts of noncurrent assets are under performing.

Suggested Citation

  • Botoc Claudiu, 2013. "Profitability - Capital Structure Trade Off: Case Of Publicly Romanian Companies," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 1(1), pages 969-975, July.
    • Handle: RePEc:ora:journl:v:1:y:2013:i:1:p:969-975
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    File URL: http://anale.steconomiceuoradea.ro/volume/2013/n1/102.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    weather derivatives; burn analysis; DSM; IVSM;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies
    • 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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