Open Access
Article
SciPap-844
Evaluation of Profitability Impact on Selection of Financing Sources Under Conditions in Visegrad Group Countries in the Field of Power Engineering
by
Petra Růčková 1,*
1 School of Business Administration in Karvina, Department of Finance and Accounting, Silesian University in Opava, Univerzitní náměstí 1934/3, Karviná 733 40, Czechia
* Authors to whom correspondence should be addressed.
Abstract: The topic of the use of financing sources in business is being dealt with by economists for more than half of century. Searching for suitable combination of own financing sources and debts led to many studies and later theories, which dealt with optimization of capital structure. Focus on power engineering is based on the fact that energy safety of V4 countries is one of priorities of cooperation. The aim of this article is to find out based on reviews of previous studies and elaborated analyses whether achievement of profitability has impact on decision-making as it comes to the use of debt financing and whether the results of the analysis indicates tendency towards dynamic trade off theories of capital structure in the selected countries in the field of energy. Opposite situation is also the subject of interest thus whether higher rate of profitability positively influences the use of debt finances. This article considers the analysis of 417 big and middle-sized companies of V4 group (the Czech Republic, Hungary, Poland and Slovak Republic). Correlation analysis and panel regression are the main methods being used for testing. Testing is provided by the Eviews programme. Data used in testing were gained from Amadeus database.
Keywords: Profitability, Capital Structure, Correlation Analysis, Debt/Equity Ratio, Dynamic Trade Off Theory, Panel Regression
JEL classification: G30 - General, G32 - Financing Policy • Financial Risk and Risk Management • Capital and Ownership Structure • Value of Firms • Goodwill
SciPap 2017, 25(1), 844
Received: 1 September 2016 / Accepted: 20 March 2017 / Published: 12 April 2017
