Abstract:

Capital is needed for development of economy and companies and capital structure has been broadly discussed subject and their variability in the researches in different countries, while there always has been a search for what could be the optimal structure to maximize wealth and use of own and borrowed means. Vitally important it is for listed companies on the Stock Exchanges, that their capital structure indicate to investors their risk level and origin of funds to generate business and profit. Due to regional proximity of capital market in the Baltics and Nordics, Author puts forward following research aim: to evaluate current and historical capital structure ratios of listed companies on the Stock Exchanges in the Baltics and the Nordics in 2004-2018. In the research was performed both financial and statistical analysis to calculate main capital structure impacting ratios of listed companies in the Baltics and in the Nordics as of end of 2018 and to evaluate those capital structure ratio trends in 2004-2018 and to assess their development of listed companies in the Nordics compared to the listed companies in the Baltics. Author concludes that on the surface listed companies on the Baltics and on the Nordics Stock Exchanges are similar in their Capital ratio and Financial Leverage level,  more in-depth analysis revealed that there are differences among the listed companies on the six reviewed Stock Exchanges, from one part they are in favor of ones listed in the Baltics, in terms that the listed companies in Nordics have significantly more Assets financed by Debt, rather than Equity, while listed companies in the Baltics in turn have used less of Debt, compared to Equity to finance their Assets.  Nevertheless, listed companies in the Nordics are more efficient in Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) generating in terms of number of EBITDA needed to cover Debt, and in this ratio, there is the greatest deviation and variability among companies. The best situated are companies listed on the Stockholm Stock Exchange.