Factors Affecting the Capital Structure of Energy Companies

Abstract

Purpose – The energy sector is a fundamental resilience point for modern economies and a vital part of our daily lives. From industrial production to domestic use, energy has become strategically important in recent years, with issues such as environmental sustainability and energy efficiency gaining prominence. In this context, the financial soundness and sustainability of energy firms play a critical role for the future of the sector and economic stability. This study aims to analyze the factors affecting the capital structure of 26 energy firms traded on Borsa Istanbul. Design/methodology/approach – In the study, the data of energy firms for the period 2019-2023 are analyzed using panel data analysis methods. Results – The results of the study show that the current ratio, return on assets ratio and tangible fixed assets to total assets ratio variables negatively affect the capital structure of energy firms, while the earnings before interest and taxes/sales ratio variable positively affects the capital structure of firms. Discussion – The findings provide important guidance to help firms operating in the energy sector to assess their financial health, improve their sustainability and make strategic decisions.