Possibilities for improvement of cooperatives' capital structure in the region of Shumen
2007
Stoyanova, S.
The structure of the capital of a certain organization, including cooperatives, is a reflection of the proportion between the two dimensions of the capital own and hired, used for financing the long-term development of the economic unit. Appearing as a result of accepted decisions for financing of the activity, this proportion might have either an accidental character or might be a result of one intentional choice. For the prosperity of cooperative and for its good market positioning, it is of vital importance being found that optimal capital structure, guaranteeing the sustainability of the financial balance and persistence in a competitive environment. The object of study and analysis in this paper is the capital structure of the cooperatives in the Region of Shumen. The study clearly shows that in their economic activity, the cooperatives employ both own and hired (foreign) capital. Regarding the object of this activity, the proportion between these two sources of finances is different. Within the cooperatives from the region of Shumen is observed the a domination in using of own capital. The domination of the own capital over the hired capital is reckoned as positively but it also hides some hazards. The main goal of the cooperatives is to stance in zone of middle capital level. This allows the harmonic distribution of the risks between own and hired capitals. The skill for attracting foreign capitals, which being combined in a propoer way with own capitals is the specifics for the presence of a modern management. The possibilities for improvement of the capital structure and the increase of the hired capital share concerning the cooperatives might be achived in diverse directions. They can be outlined as: active participation in project application for the sake of fund providing coming from European programs; active participation in the state programs for subsidizing; using the possibilities for credits, given by various financial institutions; exploring the possibilities for 'self-financing', by internal loans from the cooperative's members.
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