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University of Novi Sad, Faculty of Economics in Subotica, Subotica, Serbia
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University of Novi Sad, Faculty of Economics in Subotica, Subotica, Serbia
University of Novi Sad, Faculty of Economics in Subotica, Subotica, Serbia
The company's financing structure is one of the main factors of its successful functioning, as well as finding an adequate balance between its own financing and debt financing. Debt financing is a common way for companies to raise funds for their operations, investments, and other business activities. It involves borrowing money from lenders or investors and agreeing to repay the borrowed amount along with interest over a specified period. Companies can obtain loan financing from various sources such as banks, credit unions, private investors, and bonds. There are many internal determinants that can have a positive or negative impact on the trend of the company's indebtedness. In this study, the authors observed a period of 15 years and 10 companies of the Serbian textile industry, defining a model of internal determinants of companies' indebtedness. The authors used POLS and a fixed effects model to generate an adequate model of determinants. The results indicated a greater adequacy of the POLS model and at the same time showed a negative impact on indicators of financial stability, current liquidity, and profit on assets.
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