Enterprise Performance and Specific Financial Sources

Abstract

This paper is focused on specific capital sources used for financing of entrepreneurial activities. Classical sources contain equity in various forms and liabilities in a form of issued bonds, loans mainly provided by banks. In recent years there have been appearing more and more non-standard sources. These non-standard sources consist of the loans provided by individual owners, parent and daughter companies. There can be detected different incentives for this kind of behavior. Capital structure generally influences company's stability, performance and determines financial (or leverage) risk. The aim of this paper is to compare insolvent companies and companies without existential difficulties. The comparison is conducted in a way of using special financial sources. The analysis is based on the data sample obtained from the corporate database Albertina. Ratio analysis describes the capital structure. The computed capital structure is summarized and evaluated by descriptive statistics. Obtained results prove if insolvent companies tend to use these specific sources more than the rest of companies.