The Impact of Financial Leverage on Performance of Trade in Serbia
The Impact of Financial Leverage on Performance of Trade in Serbia

Summary/Abstract: The capital structure, i.e. financial leverage is one of the significant factors of (trade) companies' performance. Financial leverage affects liquidity, profitability and other segments of performance of trading companies. Application of the correlation analysis in empirical research of trade sector in Serbia for the period 2008-2013 showed that financial leverage positively affects return of assets and return on equity while negatively affects current liquidity, quick liquidity and return on revenue. Concerning the statistical significance, the impact of financial leverage in trade of Serbia is significant in quick liquidity and return on equity (sig. < 0.05). Familiarity with these effects of financial leverage is significant for meeting future goal performances in trade in Serbia. Beside theoretical knowledge of capital structure, one of the prerequisites is also an adequate integral control of key determinants of financial leverage in trade of Serbia, which is very special compared to other countries, above all developed market economies (for example, UK).

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