ABSTRACT
This chapter conducts a comprehensive review of internal factors chosen for examination, aiming to address the question of the extent to which the composition of firms’ capital structure is influenced by these factors. Each section explores an individual key factor, namely tax burden, profitability, asset structure, financial liquidity, firm growth, risk, depreciation and working capital. The discussions within each section revolve around their impact on capital structure within the frameworks of the trade-off and pecking order theories. Each section provides a research overview of the relationship between the specific factor and leverage, supported by relevant literature findings. This chapter highlights the substantial body of research demonstrating the link between capital formation decisions and various firm-specific factors. This chapter is designed for a wide range of readers such as researchers, academics, students and professionals in business management or investment. It explains the factors affecting how companies manage their finances, highlights why these factors are important and references contemporary literature sources.
