engleski

The importance of financial structure for the profitable operation of a company

Due to diverse business conditions, which are mainly generated by the environment, affected by adverse economic circumstances and frequent changes, companies are often faced with the scarcity of their own resources. Ensuring adequate sources of financing of its business development is a priority for every company ; in other words, attention is drawn to the ability of a business to obtain appropriate funding. In order for a company to do business seamlessly, it is vital to secure optimal funds. Companies use funds to do core business, and we can even say that economic benefits are derived from company assets. The importance of the economic benefits the company obtains from the resources lies in the generation of revenue and expenditure as a consequence of doing business. The generation of revenue and expenditure leads to company business results. A positive financial result allows retention of a higher profit in the company while reducing debt. The company yields higher revenue than expenditure. In case of a negative financial result, the company fails to cover all expenditure due to insufficient collection of revenue. The aim of this paper is to research the relation between sources of financing companies use to do business and the business results of the company in the observed period. The conducted research covered a representative sample of companies in the business of trade. In order to examine and quantify the connection between variables of interest, an analysis of secondary data gathered from company financial reports published by the Financial Agency of the Republic of Croatia was conducted.

debt ; profitability ; company ; revenue and expenditure

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