In this study, we investigate the relationship between the capital structure and the profitability of the firms. We focus our study unto 53 construction companies of Albania for years 2016 -2019, and by calculating variables to measure both capital structure and profitability, we run multiple regression analysis. We use Return on Assets and Return on Entity to measure profitability and up to five different variables to measure the capital structure. We notice that the construction companies use mainly the short-term leverage to fund their activities. The regression results show that there is no significant impact of the capital structure on the profitability of the firm, whereas we notice a significant relationship between the capital structure and the Return on Entity of these firms. More specifically, our results show that the current liabilities to total assets ratio and the current liabilities to total liabilities ratio have a negative correlation with the Return on Assets of the entities. The non-current liabilities to total assets, current liabilities to total assets and total liabilities to total equity ratios have a positive relationship with the Return on Equity of these firms, with the last ratio having the biggest impact. These findings contribute to the existing literature on the relationship between capital structure and performance and give hints to more profitable ways of financing for these companies such as relying on long-term financing or finding alternative ways in regional capital stock markets.

Small Medium-Sized Enterprises (SMEs) is one of the most important engines of economic growth in Albania. They make a significant contribution to local and global trade and also to the national economic development. SMEs have the largest proportion of total Albanian employment, almost 78% of the total number of employed people. They generally face difficulties in financing and investing decisions, globalization, and other matters, mainly because of their inappropriate formal financial reports. These enterprises must prepare adequate financial statements and proper accounts to deal with third parties’ needs and ensure stakeholder’s confidence. This requires financial statements to be prepared by international financial reporting standards (IFRS), national accounting standards, and local government laws. Therefore, the International Accounting Standards Board (IASB) provided a new standard to ensure the required financial reporting quality for SMEs. The main focus of this study is to examine the attitudes of financial statement’s information’ users in Albania towards the adoption of this financial reporting standard for SMEs as progress on the general financial reporting process in Albania, and also to estimate their capabilities and interests on this matter.

A healthy cash flow is a very important point for a business. Many facts show that a healthy cash flow is more important even than the creation or distribution of goods and services. Being one of the key points, the cash flow is defined as a management tool in the company. So the management continuously requires different financing ways for the company in order to significantly decrease the gap created between the liquidation of payable accounts period and collection of receivable accounts. In the world there are diverse financing ways, by which the most common are bank loans. But with the trade development is also increasingly developing the factoring industry (Note 1). The purpose of this analysis is to sift through given examples the moment when a company needs factoring, to analyze the gap of liquidity and also, through an econometric model built on the basis of a empirical study, that we have done for 110 SMEs in Albania, to prove that the indicators of liquidity determine which companies are better suited to use factoring as a financing source for the working capital.

Financial performance mainly reflects the overall financial health of the business sector over a period of time. It shows how well an entity is using its resources to maximize shareholder’s wealth. Although a thorough assessment of a firm's financial performance takes into account many other measures, the most common performance measurement used in the area of finance are financial ratios. This paper provides a comprehensive study of the financial performance measurement literature related to the construction sector in Albania. The literature covers studies from Albania, Iran, India and Pakistan, but some international evidence has also been presented. The construction sector is chosen because of its impact on economic growth in Albania, it represents the second main sector according to its share effect on Albanian GDP. The financial ratios used to measure the financial performance of the construction sector are the debt ratio, the liquidity ratio and the profitability ratio from the period 2018-2020 for 100 construction companies in Albania. Return on Assets (ROA) is taken as the predictor variable and three financial ratios are taken as the predictive variables. This research reveals that the financial ratios have positive correlation with the dependent variable whereas the leverage ratio has negative correlation. To overcome the limitations of the forthcoming studies, the considered number of years need to be increased and other models such as Market Value Added, Capital Asset Pricing Model and Economic Value Added can be used to be tested for research to analyze other factors that may affect financial performance.

The aim of this study is to analyze the major cause of the instability of foreign direct investments in Albania these last years, their lowest level of FDI when compared with other countries in the region, and the importance of these investments in developing countries like Albania. The size of FDI has a significant effect on the financial and macroeconomic factors, government and infrastructure factors, and the factors by fiscal nature. In this study, we disengage fiscal factors and in particular, the corporate profit tax rate. The aim of this study was to prove that in countries with weak legal infrastructure, this factor is statistically significant in attracting Foreign Direct Investment. Thus, should Albania be considered as a country with weak legal infrastructure? Due to this question, we took into consideration specific indicators measured in recent years by various world organizations by comparing them with various countries of the region. Also, we built an econometric model through multiple regression by collecting data on the tax rate applied in Albania from 1992-2016, and the level of FDI for this period. This is in a bid to ascertain the effect or impact that profit taxes has on FDI inflows in Albania. In conclusion, Corporate Tax Rates is a factor that has a very significant impact on the size of FDI in Albania.