The Impact of the Asset Structure on the Capital Structure

Abstract

The capital structure depends on many factors, of which the asset structure is considered to be a primary factor. In accordance with the golden balance rule, companies should harmonize the deadlines of binding assets and deadlines of obligations maturity in order to provide company's liquidity. In accordance with this, long-term bound assets should be fnanced from long-term sources. Within the longterm sources companies need to decide whether the assets will be financed from borrowed or own sources. Numerous studies in this feld indicate that, in addition to deadlines of binding assets, the source of funding is also influenced by their materiality, i.e. their convenience to serve as security for a loan, and by their specifcity. The goal of the research in this paper is to show from which sources the companies listed on the Banja Luka Stock Exchange finance their assets and whether they adhere to the golden balance rule.

Keywords

• borrowed capital
• own capital (equity)
• collateral
• asset structure