FINANCIAL STRUCTURE OF STOCK COMPANIES IN MONTENEGRO IN THE FUNCTION OF PROFITABILITY

The financial structure of the company refers to the structure of financing of business assets and concerns the relationship between their own and borrowed sources of financing. Financial strategy of the company, as a part of business strategy, has one of the main financial objectives: to achieve desired financial result, which would guarantee the preservation of their own capital and the realization of the principle of continuity. One of the company's financial goals is to provide optimal financial structure that has the purpose of maximizing business performance. The aim of this paper is to determine the degree of correlation between financial structure (measured by indicators of indebtedness and interest coverage) and profitability (measured by profit rates and rates of return on equity). This paper seeks to answer the question of cause and effect in the context of financial structure and profitability of the company: whether a certain financial structure (higher or lower indebtedness) causes more or less profitability, or there is a reverse effect. Empirical research is conducted in the case of joint stock companies in Montenegro, which according to the Law on Accounting and Auditing of Montenegro have the obligation to draw up quarterly financial statements. It should also be noted that the legal form of companies is one of the factors of the financial structure, and consequently, this research can be the basis for further analysis in the case of other legal forms of enterprise.