Overview of the company's financial structure

• Author: Viorica Mirela Stefan-Duicu
• Position: Assistant Lecturer, Faculty of Economic Sciences, 'Nicolae Titulescu' University, Bucharest, Romania
• Pages: 181-186

Viorica Mirela Stefan-Duicu

181

LESIJ NO. XIX, VOL. 1/2012

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OVERVIEW OF THE COMPANY’S FINANCIAL STRUCTURE

Viorica Mirela STEFAN-DUICU*

Abstract

The purpose of the paper is to highlight the fact that the company’s financial structure is,

empirically speaking, the parent entity from which star ts all the activities that generate the self

existence of the company. The company’s financial structure also known as the company’s capital

structure conducts directly the organizational and inter-organizational behavior and indirectly the

classification on the market of the referred economic agents. This paper aims to describe the factors

that influence the company’s financial activity, it’s direct and related sources of funding used to

maintain or increase a satisfying turnover and the theories that conduct the company’s capital

structure.

Keywords: financial structure, company, economic agents, capital, turnover

Introduction

The financial structure of the company reflects the composite formation of the capital that can

be borrowed and represents the ratio between the short and long term financing.

The financial structure of the company generated countless disputes along the theories of

classifications of companies in the market, theories regarding the financing resources of an enterprise

and the organizational and inter-organizational behavior of the direct participants in the economy.

Over the time informational frames were formed regarding the necessary theories for

companies classification in the market, theories regarding the financing sources and also debates,

critics and additions to the financing decisions as in practice and in theory.

The first economic representation of a company has been shaped by the neoclassic model and

started from the ideas promoted by Adam Smith in 1776 regarding the fact that individual focused

interests pursuit should lead to a common interest. The neoclassic theory regarding the economic

balance, partial and global, as Prof. Ion Stegaroiu said, is considered to be the best finalized

representation of market economy functioning, where the company has the central role.

The traditional model includes a number of significant features of the analyzed environment,

as follows: the description of balance conditions in the perfect competition context, characterized by

the atomicity of participants (the existence of a high nu mber of buyers and sellers whose volume of

individual exchange is negligible compared to the overall volume of trade), the product homogeneity

(the suppliers trade identical goods, so the buyers are indifferent to the identity of the seller), free and

transparent market entrance (the traders are perfectly informed regarding the price and quality of

products) and the individual rationality principle.

In the neoclassic theory, the company is seen as an entrepreneur expressing its own will (the

atomicity feature) who, eventually, will seek the maximization of profit (rationality feature),

promoting its product (the homogeneity feature) to a group of perfectly informed buyers (economic

transparency feature).

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*Assistant Lecturer, Faculty of Economic Sciences, “Nicolae Titulescu” University, Bucharest, Romania

(email : chirita.mirela@gmail.com).