Modeling Factors of Formation of Capital Structure of an Economic Entity

Abstract

AbstractStabilization of domestic economy and ensuring its sustainability need to improve financial management of economic entities. Achieving profitability of enterprises is impossible without the introduction of innovative technologies, renewal of existing fixed assets, which requires large-scale attraction of additional capital. Issue of capital formation becomes basis of financial strategy of any enterprise. In this regard, problem of developing and introducing new methods of managing functioning of capital of enterprises is of particular importance. Thus, it is necessary to develop practical recommendations regarding formation of optimal capital structure of enterprises. In this regard, it is necessary to analyze possibilities of using various sources of capital formation; substantiate main factors of the formation of capital structure in conditions of domestic economy; highlight variables that determine capital structure; on this basis, construct multivariate econometric models aimed at obtaining empirical confirmation of validity of theoretical provisions regarding the significance of influence of various factors on formation of capital structure in modern conditions. Methodological foundations of systems approach and economic and mathematical modeling are applied: formal and dialectical logic, analysis and synthesis—to study essence of capital, building modern theoretical models for formation of capital structure, analysis of economic and statistical indicators. Proposed approaches and models for the formation of capital structure can be used by financial analysts to develop strategic plans for development of an enterprise and optimize capital structure.KeywordsCapital structureFactors of formation of capital structureLoan capitalEquityEconometric modelProfitabilityDynamics of enterprise assets