Achievable debt level of business corporation

Štěpán Chadim

Master's thesis

Abstract:

The main objective of this thesis was to come up with a set of data, which will answer the question “which business are more successful in obtaining external sources of financing?” Thesis is divided into practical and theoretical part. In theoretical part are introduced the main sources of external capital and various different theories about capital structure. In practical part I have done a research based on the Albertina-provided data about financial statements of Czech companies. I was trying to find out, which companies are best in obtaining bank loans and forcing their suppliers to finance them through invoices with long due dates. Through the practical part I found out, that there is no direct correlation between the financial quality of the company (profitability and other ratios) or its position in supply chain and the power / ability to do things described above. Because of that, I tried to name a possible reason for that. It is up to further investigation if mentioned reason and inaccuracies are sufficient to explain the unexpected variance

Abstract:

The main objective of this thesis was to come up with a set of data, which will answer the question “which business are more successful in obtaining external sources of financing?” Thesis is divided into practical and theoretical part. In theoretical part are introduced the main sources of external capital and various different theories about capital structure. In practical part I have done a research based on the Albertina-provided data about financial statements of Czech companies. I was trying to find out, which companies are best in obtaining bank loans and forcing their suppliers to finance them through invoices with long due dates. Through the practical part I found out, that there is no direct correlation between the financial quality of the company (profitability and other ratios) or its position in supply chain and the power / ability to do things described above. Because of that, I tried to name a possible reason for that. It is up to further investigation if mentioned reason and inaccuracies are sufficient to explain the unexpected variance in the results. Or if the phrase “successful in obtaining” needs to be changed.

Keywords

Debt level, Loans, Corporate finance

Keywords

Debt level, Economic ratios, expense interest, loans, External sources, Profitability

Language used: English

Date on which the thesis was submitted / produced: 30. 11. 2020

Thesis defence

• Date of defence: 8. 6. 2021
• Supervisor: František Poborský
• Reader: Vojtěch Menzl

Vysoká škola ekonomická v Praze

Master programme:
Finance and Accounting