Firm characteristics and debt structure in Slovak agricultural enterprises: implications for financial policy and rural development

The agricultural sector has financing issues, especially in less industrialized regions, where it is a key source of income and employment. Even though its share in GDP is declining, agriculture is crucial for rural growth and food security (Zvarikova et al., 2024a, b). Agricultural enterprises operate under the conditions of elevated risk, including climate change, price volatility, and reliance on European Union's (EU) subsidies, which complicates access to external financing (Filho et al., 2017). Under these conditions, banks tend to perceive agricultural firms as higher credit risks, thereby constraining the supply of credit (Beck et al., 2016; Nyebar et al., 2024). Hence, analyzing the debt structure of agricultural firms is essential for designing effective support policies.

Debt influences the competitiveness of agricultural enterprises, innovation capacity, and long-term sustainability (Valach, 2021). Financial limitations can undermine their market standing, while participating in the EU Common Agricultural Policy increases complexity and potential (Vozarova et al., 2020). The capital structure of firms is also determined by the internal characteristics such as firm size, legal structure, and age, which can impact their ability to raise capital or manage debt effectively. Empirical insights into levels of corporate debt in this respect are valuable for properly informed policy and strategic business decision-making. This raises a key research question.

The main aim of the paper is to examine the Slovak indebtedness of agricultural enterprises in relation to firm size, legal form, and firm age. The analysis is based on financial data from the ORBIS database and focuses on enterprises classified under NACE A. Firm-level financial data from the ORBIS database are widely used in empirical research on capital structure and agricultural finance, ensuring comparability and robustness of results across institutional settings. Since the sample is heterogeneous and the data is characterized by disparity, non-parametric methods are utilized. The Kruskal-Wallis test will be used to determine if debt indicator differences across firm groups are statistically significant. If confirmed, a Dunn post hoc test with Bonferroni correction will be used to identify targeted group comparisons.

The paper is divided into the following sections. The Literature review presents leading corporate indebtedness studies and contributory firm characteristics. The Methodology section describes data gathering, firm selection criteria, and reasons for methods used, including Kruskal-Wallis and post hoc analysis. The Results and Discussion section reveals insights in the context of previous studies, namely subsidy dependence, access restrictions to small firms, and debt differences between legal forms. Finally, the Conclusions section highlights policy implications and outlines directions for future research, specifically in the identification of additional financial and non-financial determinants of capital structure decisions.

Corporate capital structure, particularly the use of debt financing, has been a cornerstone of corporate finance theory since Modigliani and Miller's (1958) seminal work identified leverage as a core financial policy indicator. Debt influences firms' financing decisions, operational flexibility, and repayment commitments (Balcerzak and Valaskova, 2024; Kliestik et al., 2024). Under conditions of information asymmetry, credit rationing theory explains why smaller, younger, or less formally structured agricultural firms face stronger financing constraints, making firm characteristics central to lender risk assessment (Stiglitz and Weiss, 1981). The cost of debt and its implications for equity valuation therefore remain central to capital structure decisions (Harris and Raviv, 1991; Cepelova and Figura, 2024), as excessive leverage may constrain flexibility and increase the risk of financial instability (Choi, 2025).

In the agricultural sector, debt control is particularly critical given that the industry is susceptible to exogenous shocks such as climatic risk, volatile commodity prices, and shifting regulatory regimes (Vavrek et al., 2021). These influence income volatility and financial risk, increasing the importance of prudent debt management strategies to achieve long-term sustainability and competitiveness (Kim and Tru, 2015; Michulek et al., 2024).

Firm-specific features significantly impact capital structure decisions. Among these, firm size has been widely accepted as a crucial determinant. Larger enterprises typically benefit from higher transparency, stronger collateral positions, and established relationships with financial institutions, which reduce perceived credit risk. Jaworski and Czerwonka (2023) explain that these characteristics ease access to external finance, while Ghofar et al. (2025) document a positive association between firm size and leverage across countries. Empirical literature supports this relationship in the agricultural sector. Mateos-Ronco and Guzman-Asuncion (2018) determined that larger Spanish agricultural firms possess greater levels of debt, while Lososova et al. (2023) concluded that more substantial Czech farms exhibit better fiscal performance and more harmonized capital structure. At a broader European level, Vukovic et al. (2022) demonstrated that firm size improves indebtedness and financial performance of European agricultural enterprises. In contrast, evidence from Central and Eastern Europe highlights persistent financing constraints for smaller firms. Kalas et al. (2023) report that small agricultural enterprises rely more heavily on short-term debt, reflecting limited access to long-term financing and weaker bargaining power with lenders. These findings suggest convergence regarding the importance of firm size, but divergence in its implications depending on institutional development and credit market conditions. This leads to the first hypothesis:

The legal form of a firm is another significant determinant of debt structure. Legal form not only defines ownership as well as liability but also affects the regulatory environment and perception of risk by lenders. Agricultural cooperatives, partnerships, and single proprietorships may face more demanding borrowing conditions than enterprises, given differences in governance, accountability, and risk exposure. Madra (2008) illustrated the more modest access to debt by enterprises and balanced capital structures, while Kalas et al. (2023) recognized similar effects for Slovak firms, where legal structure has a major impact on indebtedness levels. Bracht et al. (2024) argue that legal form also functions as a signaling mechanism, because corporate forms reduce creditors' exposure to personal liability risks. This signaling effect is especially relevant in transition economies, where formal governance structures play a stronger role in credit allocation. Holla et al. (2024) further demonstrate that enterprises with more flexible legal forms are better positioned to access external finance and adapt their capital structures during periods of financial stress. In less developed financial systems, legal form serves as a stronger indicator of creditworthiness, motivating the second hypothesis:

Life-cycle-based capital structure models posit that firms' leverage decisions evolve over time, with younger firms relying more on external debt for growth and mature firms adopting more conservative financing as cash flows stabilize. Ivashkovskaya et al. (2013) show that leverage evolves over the firm life cycle, with higher debt levels during growth phases and more conservative financing at maturity. Qerimi et al. (2024) demonstrate that younger firms face stronger information asymmetries and higher perceived default risk, limiting access to long-term credit. Empirical evidence suggests that older firms benefit from more stable cash flows and established lender relationships. Holla et al. (2024) find that mature enterprises exhibit stronger risk management practices, improving debt sustainability. In contrast, Fenyves et al. (2020) show that younger agricultural firms in the Visegrad countries rely more heavily on external financing to support expansion, increasing financial vulnerability. While studies agree that firm age matters, they diverge regarding the direction of its effect. In developed markets, older firms tend to reduce leverage over time, whereas in emerging and transition economies younger firms often face binding credit constraints that shape their debt structure. This motivates the third hypothesis:

Beyond firm size, legal form, and age, prior research has identified additional determinants of capital structure, including profitability, asset tangibility, liquidity, and sector-specific risks, such as yield and price volatility, all of which shape firms' debt capacity and cost of borrowing (Durana et al., 2024; Kalas et al., 2023; Ren et al., 2022). External conditions, including interest rates and market environment, further influence financing decisions (Huang et al., 2018). However, existing studies consistently show that firm size, legal form, and age remain the most robust and comparable determinants across institutional settings, even though their effects differ by region. While Western European evidence points to more stable and long-term financing patterns, Central and Eastern European firms rely more heavily on short-term debt due to differences in financial market development and institutional frameworks. By jointly analyzing multiple debt indicators and explicitly differentiating firms by size, legal form, and age within a single national agricultural context, this study complements prior research and extends context-specific evidence from an emerging economy.

The main aim of this paper is to explore the indebtedness patterns of 698 Slovak enterprises in the agriculture sector (sector A according to the NACE classification), emphasizing the impact of significant determinants, including firm size, legal form, and firm age, regarding their indebtedness. Furthermore, the paper also aims to develop a discriminant model to analyze the relationship of the above determinants and the financial performance of the businesses so that the companies can be labeled as either prosperous or non-prosperous based on their debt indicators and other firm characteristics. Sector A includes agriculture, forestry and fishing activities and is characterized by cultivation of crops, livestock, forestry, and aquatic resources to provide raw materials and essential products for local and industrial uses. Sector A is important to the economy because it provides essential raw materials for the food, textile, construction and energy industries. It is also crucial in maintaining rural communities, biodiversity, and environmental sustainability through proper land and resource management practices.

Financial data from the ORBIS database, recognized as a comprehensive source of business and financial data on more than 400 million private and public firms worldwide, was preferred for comprehensive debt structure examination. The analysis initially utilized a dataset of 2,095 financial reports from agribusiness enterprises in Slovakia spanning the period 2018–2023. However, not all enterprises met the requirements for debt indicator calculation, especially regarding the completeness and consistency of financial statements. Accordingly, the dataset was refined to include only enterprises that provided complete and consistent data across all selected years, ensuring longitudinal comparability. To further improve data quality and the robustness of analysis, outliers were removed using the Z-score method, in which outliers are detected based on their deviation from the sample mean. Following the approach of Samariya et al. (2020), observations with a Z-score greater than ±3 were excluded, using a common threshold in empirical research to quantify extreme values without reducing the sample size to an insubstantial point. By applying these criteria, the dataset includes only businesses with full and consistent data throughout the selected period, ensuring longitudinal comparability. After this selection procedure, the final sample for analysis included 698 Slovak agricultural firms.

The final dataset consists of Slovak agricultural firms and reflects substantial heterogeneity in terms of firm size, legal form, and age. The sample is dominated by medium-sized enterprises (approximately 75%), followed by large firms (20%), while small and very large enterprises are only marginally represented. Regarding legal form, private limited companies prevail (about 64%), with partnerships accounting for roughly 27% and public limited companies representing less than 10% of the sample. Firm age was measured as years since establishment; most firms have been operating for 20–30 years (around 37%) or more than 30 years (31%), indicating a generally mature and stable sample, while younger firms (less than 10 years) form only a small proportion.

The financial analysis of indebtedness of Slovak agricultural enterprises was conducted for the period 2018–2023 using twelve debt ratios, including total indebtedness (TI), self-financing (SF), current indebtedness (CI), non-current indebtedness (NCI), debt-to-equity (DE), interest coverage (IC), interest burden (IB), debt-to-cash flow (DCF), financial independence (FI), non-current assets coverage (NCAC) and insolvency (Ins) ratios. The formulas necessary for those calculations are provided in Table 1.

The statistical analysis itself was carried out in the following methodological steps.

1. To determine whether the dataset had a normal distribution, several normality tests were conducted. The Shapiro-Wilk test with high statistical power was used as the primary test. The other tests used were the Kolmogorov-Smirnov, Anderson-Darling, and Cramer-von Mises tests, all of which check for deviation of the data distribution from normality. The null hypothesis of normality was rejected because the p-value was low (typically less than 0.05). Since parametric tests like ANOVA assume normality, nonparametric methods were used where normality was not relevant.

2. To test whether debt ratios differ by firm size, legal form, or age, the Kruskal-Wallis test was used. This nonparametric rank test is suitable for testing three or more independent groups when observations are not normally distributed. A significant test statistic would indicate that at least one median group is different. However, the Kruskal-Wallis test does not reveal between-group differences. Therefore, Bonferroni correction was implemented in post-hoc tests to prevent Type I errors with multiple tests (Schrodi, 2016), because this method reconfigures the significance threshold based on the number of comparisons to formulate more dependable conclusions.

Several debt ratios can be used to measure corporate indebtedness, yet the following were specifically chosen due to their compatibility with the objectives of the study. The descriptive statistics of these indicators, computed over the study period, are presented in Table 2 for agricultural enterprises in Slovakia. In addition to the mean, the median, standard deviation, the first (Q1) and third (Q3) quartiles are reported to capture the skewness and heterogeneity of firm-level financial indicators. The inclusion of quartiles complements the use of non-parametric methods and provides a more robust description of the distribution of indebtedness indicators.

TI and SF ratios are ancillary indicators of debt and equity financing. With 57.4% of assets financed through debt, the level appears acceptable for the agricultural sector, which tends to have high capital requirements. This suggests that Slovak agricultural enterprises operate within a sustainable leverage range, comparable to developing economies but below the higher indebtedness typically observed in developed markets (Huang and Ye, 2021). The 42.6% self-financing ratio is consistent with the optimal 40–50% (Dinh and Pham, 2020), indicating a relatively prudent capital structure that balances external financing with internal resources, a pattern also confirmed by earlier Slovak studies (Stefko et al., 2021). Debt maturity structure further reinforces this interpretation. The CI ratio accounts for 42.1% of overall debt, which is under the 50% threshold, showing strong short-term solvency, while the NCI ratio of 15.3% points to limited exposure to long-term debt risk. However, despite moderate overall indebtedness, leverage-based indicators reveal potential vulnerabilities. The average DE ratio of 2.092 exceeds the commonly accepted optimal range of 0.5–1.5 (Siebenbrunner et al., 2024), while the EL ratio of 3.092 also surpasses recommended levels, suggesting a relatively high reliance on debt financing that may amplify financial risk under adverse conditions. At the same time, the average IC ratio of 10.632 indicates a strong ability to service debt, with IB ratio absorbing only 14.7% of EBIT (Vo, 2023). This combination of high coverage and elevated leverage may signal cautious borrowing behavior or underutilisation of debt-financed growth opportunities rather than immediate financial distress (Remeikiene et al., 2025). In contrast, the DCF ratio of 5.331 exceeds the ideal benchmark of 4 (Voon et al., 2022), highlighting vulnerability from a cash-flow perspective, particularly in periods of income volatility typical for agriculture. The FI ratio of 1.038 indicates a nearly balanced relationship between equity and debt, exceeding the minimum recommended value of 1 (Stamp, 2012). Such capital structure enhances resilience to external shocks by improving enterprises' capacity to absorb unexpected costs. Similarly, the NCAC ratio above 1 confirms that fixed assets are predominantly financed through long-term sources, reducing liquidity risk associated with short-term financing of long-lived investments (Arhinful and Radmehr, 2023). Finally, an Ins ratio below 1 suggests that receivables exceed total liabilities, indicating overall financial stability, although effective liquidity ultimately depends on timely receivables collection.

Slovak agricultural enterprises generally operate with a sustainable level of indebtedness based on metrics such as IC, NCAC, and Ins ratios, all of which are well above threshold levels, disclosing manageable debt obligations. However, metrics such as DE and DCF ratios demonstrate significant dependence on debt financing and limited capability for generating sufficient cash flow, which is dangerous in economic downturns. Thus, firms need to monitor closely debt sustainability, particularly their cash generation relative to debt.

The main aim of the multivariate debt analysis was to identify statistically significant differences in debt levels across firm size, legal form, and age groups. Normality tests (Kolmogorov-Smirnov and Shapiro-Wilk) ensured non-normal data distribution. Therefore, the Kruskal-Wallis test, which is non-normality and outlier-resistant, was applied to examine differences by debt financing determinants. Results reveal a significant difference between six debt indicators, particularly TI, SF, CI, DE, FI, and EL ratios, across firm sizes. Other indicators did not reveal notable differences among the groups. A post hoc test recognized the most significant differences between the indebtedness ratios by firm size. Table 3 summarizes pairwise comparisons and statistically significant differences between small and medium Slovak agricultural firms in six significant debt indicators.

From a practical perspective, firm size shapes how lenders assess credit risk and determines access to long-term financing in agriculture. Larger enterprises generally have better access to external financing, higher liquidity, and more substantial collateral, which improves their creditworthiness and borrowing conditions (Kalas et al., 2023). This pattern is consistent with the pecking order theory, whereby larger firms rely more on internal funds and use debt more selectively, resulting in more stable leverage ratios over time, whereas smaller firms, particularly in growth phases, tend to finance expansion through higher debt exposure, increasing financial risk.

Empirical evidence across regions helps explain these dynamics. In less stable or turbulent environments, such as emerging markets, the tendency of smaller firms to accumulate debt is associated with elevated vulnerability (Ivashkovskaya et al., 2013). Xu et al. (2021) show that larger firms have greater access to long-term financing, reducing dependence on short-term debt and lowering refinancing risk. Similarly, comparative European evidence suggests a clear regional divide, as agricultural enterprises in Western Europe rely more on long-term financing, while smaller firms in Central and Eastern Europe depend more heavily on short-term loans (Gostkowska-Drzewicka and Koralun-Bereznicka, 2024). Firm size is also closely linked to performance and resilience. Studies from Poland and Hungary indicate that larger farms benefit from economies of scale, higher EBIT, and improved financial stability (Szollosi and Erdos, 2023). Evidence from publicly listed Serbian agricultural companies further shows that larger firms rely less on short-term debt due to stronger profitability and improved access to capital markets (Grujic et al., 2024). However, the strength of this relationship varies across institutional contexts, as demonstrated by differences among Visegrad Group countries, where larger enterprises generally face fewer short-term financing constraints, although patterns are not fully uniform (Fenyves et al., 2020).

In the Slovak context, firm size also interacts with regional development and policy conditions. Larger enterprises benefit from superior risk assessment capabilities and more favorable financing terms (Holla et al., 2024), while regions with a more diversified size structure of enterprises tend to exhibit greater economic resilience (Zenka et al., 2021). At the same time, larger farm size does not automatically translate into optimal financial outcomes, as Slovak agriculture has not always fully exploited economies of scale, leading in some cases to excessive indebtedness driven by external financing (Szabo and Grznar, 2015). Subsidy-supported large farms may even experience reduced profitability due to higher leverage burdens (Serences et al., 2014). Conversely, smaller enterprises often operate with fewer fixed assets and limited collateral but may achieve efficiency gains through production improvements, although empirical evidence does not always show statistically significant differences in overall financial health by size alone (Lososova et al., 2023). Larger enterprises also face specific risks, such as exposure to weather-related shocks affecting large-scale investments, despite their better access to credit (Enjolras and Sentis, 2011). For lenders and policymakers, these findings highlight why smaller enterprises face structural disadvantages in credit markets.

The legal form of an enterprise significantly affects debt financing choices, credit availability, risk, and legal obligations, making it a key determinant of capital structure. The Kruskal-Wallis test results show statistically significant differences in many debt ratios by legal form in Slovak agriculture, except for the IB, DCF, and NCAC ratios.

Since there were significant differences in indebtedness ratios, a post hoc test revealed which legal forms differed by monitored indicators. Table 4 reports the pairwise comparison results, showing that most of the significant differences are between partnerships and public and private limited companies. Private and public limited companies also differed in the CI and Ins ratios.

The legal form of an enterprise is particularly relevant for lenders, as it directly affects liability, governance, and risk perception. Limited liability forms are typically associated with more favorable loan conditions, as they reduce creditors' exposure to risk and increase their willingness to lend (Kalas et al., 2023). This risk-shielding effect improves access to external finance and differentiates corporate entities from cooperatives or individual enterprises.

Beyond credit access, legal form also affects firms' ability to utilize public support instruments. Enterprises with more flexible governance structures tend to manage subsidies and financial resources more efficiently, enhancing their access to external funding (Serences et al., 2014). In contrast, rigid organizational forms may face constraints in financial management, limiting their effective use of available financial instruments (Belas et al., 2024; Poliakova et al., 2024). Greater legal and organizational flexibility further allows firms to adjust their capital structure more rapidly during periods of financial stress, without jeopardizing balance-sheet stability (Holla et al., 2024). Comparative evidence highlights strong regional differences in the role of legal form. In Western Europe, corporate entities generally secure bank financing more easily, whereas in Central and Eastern Europe smaller cooperatives and individual farms dominate and often rely on a combination of subsidies and short-term resources (Gostkowska-Drzewicka and Koralun-Bereznicka, 2024). Xu et al. (2021) further demonstrate that firms' responses to capital structure changes differ across regions, with traditional organizational forms in Central and Eastern Europe being more vulnerable to the adverse effects of high indebtedness. Within the European Union, limited liability and public limited companies typically exhibit stronger access to debt financing than cooperatives or private enterprises, contributing to greater financial soundness and competitiveness (Szollosi and Erdos, 2023). Similar patterns are reported by Fenyves et al. (2020), who document pronounced differences in financing conditions between publicly held enterprises and smaller farms, the latter being perceived as less stable by lenders.

The Slovak agricultural context further illustrates these mechanisms. Legal form significantly affects indebtedness and long-term viability of farms (Toth et al., 2015). Cooperatives often rely on member contributions and subsidies, resulting in lower leverage but restricted access to commercial credit, whereas limited liability companies make greater use of external financing and typically exhibit higher indebtedness (Madra, 2008). However, this greater access to debt may also constrain expansion if firms rely excessively on self-financing to avoid over-indebtedness, as observed among private limited companies in Slovakia (Ivashkovskaya et al., 2013). Finally, legal form also interacts with risk management behavior. Enterprises with stronger institutional protection are more inclined to adopt insurance and other risk-mitigation tools, which in turn improves their creditworthiness and access to finance, such an important consideration in Slovak agriculture, given pronounced climate and market risks (Enjolras and Sentis, 2011). Overall, legal form shapes not only access to debt, but also the balance between financial flexibility, risk exposure, and long-term sustainability.

Firm age strongly affects capital structure, as older firms have stable cash flows, secured creditor relationships, and easier access to long-term finance, while younger firms rely more on external finance for growth. Kruskal-Wallis test results shows that, in Slovak agricultural firms, all debt ratios except for the IB and DCF ratios differ significantly by firm age. A post hoc test was conducted to ascertain which indebtedness ratios varied most by firm age. The pairwise comparisons are shown in Table 5, with age group differences in Slovak agricultural firms, except between firms younger than ten years and those ten to twenty years.

Firm age provides an important signal for lenders and policymakers regarding financial stability and growth potential over the firm life cycle. Older enterprises are typically perceived as more stable due to accumulated internal resources and long-standing relationships with creditors, which improves their creditworthiness. This aligns with life-cycle–based capital structure arguments, according to which firms rely more heavily on external financing during growth phases and gradually adopt more balanced debt–equity structures as they mature (Fenyves et al., 2020).

Empirical evidence consistently shows that younger firms in expansion phases tend to exhibit higher indebtedness, as growth strategies require substantial external capital (Szollosi and Erdos, 2023). In contrast, older firms benefit from accumulated capital, more predictable cash flows, and established risk-assessment processes, which support more conservative leverage policies and debt security (Holla et al., 2024). Taken together, these findings suggest that firm age is closely associated with financial stability rather than debt accumulation per se. Regional differences further shape this relationship. In Western Europe, older firms maintain stronger relationships with financial institutions and generally display lower debt ratios (Gostkowska-Drzewicka and Koralun-Bereznicka, 2024). By contrast, firms in Central and Eastern Europe often face binding financing constraints during expansion, leaving younger enterprises with limited alternatives to increased borrowing (Xu et al., 2021). Reliance on short-term debt in early life-cycle stages may therefore heighten financial vulnerability, particularly under volatile macroeconomic conditions. Evidence from the European Union supports this interpretation, as long-established firms tend to demonstrate steadier cash flows and repayment performance, allowing them to approach a more balanced mix of debt and equity financing (Madra, 2008). Conversely, firms pursuing rapid expansion through debt-financed growth may face elevated over-indebtedness risks, especially in unstable environments, as illustrated by evidence from emerging markets (Ivashkovskaya et al., 2013).

In the Slovak agricultural context, firm age plays a particularly important role in both financing and risk management decisions. Younger agricultural enterprises encounter greater difficulties in accessing loans and are often more cautious in adopting insurance instruments due to limited financial capacity and uncertainty regarding future revenues (Enjolras and Sentis, 2011). In contrast, older and more mature firms are better positioned to utilize financial and insurance tools, reflecting accumulated experience with market and weather shocks. As a result, firm age becomes a crucial factor influencing indebtedness patterns, financial resilience, and long-term stability in agriculture.

These findings underscore the importance of firm characteristics for access to sustainable debt financing in agriculture. From a rural development perspective, unequal financing conditions may constrain investment capacity and long-term resilience, particularly among smaller and younger enterprises. Policy instruments such as guarantee schemes and Common Agriculture Policy related financial measures therefore play an important role in mitigating credit constraints and shaping indebtedness patterns in agricultural enterprises (Vozarova et al., 2020; Valach, 2021). At the same time, agricultural indebtedness is increasingly intertwined with broader structural factors, including energy–agriculture market linkages (Jareno et al., 2025), sustainability-oriented production practices (Garcia-Aguero et al., 2024), and evolving consumer preferences (Duong, 2024), which may further influence financing needs and risk profiles of agricultural enterprises.

Corporate indebtedness is an essential issue affecting the ability of agricultural firms to attain long-term sustainability on the market, raise capital for investment projects, and cope with seasonal fluctuations. It is impossible to homogeneously assess agricultural firms and their indebtedness because they are a capital-intensive sector dependent on external financing and inherently unstable in production income. The main of this paper was to analyze the indebtedness of agricultural enterprises in Slovakia and determine the differences in the values of monitored debt indicators due to the firm size, legal form, and age of the firm.

This study has shown that the size and legal structure of agricultural enterprises, along with their age, affect their level of indebtedness. The study identified six debt ratios that vary statistically among small and medium-sized businesses: TI, self-financing ratio, CI ratio, debt-to-equity ratio, FI ratio, and insolvency ratio. No statistically significant differences were found regarding other firm sizes. The legal form of enterprises also showed statistically significant differences in indebtedness between various forms of enterprises in the agricultural sector in Slovakia concerning most debt indicators, except the IB ratio, debt-to-cash flow ratio, and NCAC ratio. The most statistically significant differences were not only between partnerships and public limited enterprises but between partnerships and private limited enterprises. Furthermore, disparities were noted between private and public limited enterprises regarding the CI ratio and insolvency ratio. In terms of the age of the agricultural firms, based on the results, it was noted that only the IB ratio and debt-to-cash flow ratio did not show statistically significant differences over various age groups of the firms, while the remaining indicators had substantial variations in a certain aspect. Nonetheless, there were no appreciable distinctions between newly established businesses that had been in operation for ten to twenty years and those that had been in operation for less than ten years. The research results indicate that these features are crucial in determining the method, execution, and reason for debt allocation in Slovakia, as well as the borrowing capacities to manage debt ratios. Therefore, targeted policy measures are necessary to improve access to credit for smaller and younger enterprises, particularly by adjusting collateral requirements, designing state-backed guarantee schemes, and strengthening advisory services that assist farms in long-term financial planning.

Consequently, the results of this study carry considerable implications for agricultural practice in Slovakia and indicate that the size, legal form, and age of the firms are factors that should influence their ability to manage debt and fulfill capital demands. Larger companies may have a better chance of obtaining long-term loans than younger and smaller enterprises that rely more heavily on short-term debt. For this reason, such characteristics should be taken into consideration by banks and other financial institutions whenever they calculate the risk of any business. For policymakers, this underlines the need to tailor subsidy schemes and rural development programs according to firm characteristics, in order to enhance financial stability in the agricultural sector. For banks and other financial intermediaries, the findings suggest that risk assessment frameworks should differentiate more precisely between firms based on size, age, and legal form rather than applying uniform lending standards. In addition, the premises should be on supporting smaller and younger enterprises in sourcing long-term funding and developing a proper financial plan, which forms a basis for better financial mechanisms and ensures the developmental sustainability of agriculture in Slovak territories. A stronger alignment between credit institutions, government agencies, and agribusiness managers could therefore contribute to creating a more resilient financing environment for agriculture.

Primarily, more insights are gained in this study, but certain limitations must be considered during the results interpretation. The research focuses only on agricultural enterprises operating within Slovakia, largely limiting the generality to other countries or regions with different economic conditions. In addition, the cross-sectional nature of the analysis does not allow for fully addressing potential endogeneity issues, such as reverse causality between firm characteristics and debt structure. Further research could include other countries or regions, giving comparable data and affording a better generalization of results into a larger framework. Also, the current study examined only three determinants (firm size, the legal form of the enterprise, and its age), while in future studies the analysis could include the effect of profitability or macroeconomic conditions, thereby taking a step further than this study on the incorporation of other factors into the research analysis. Another limitation is related to data constraints of the ORBIS database, which may underrepresent smaller or newly established enterprises and restrict the availability of certain financial variables. Future research could therefore benefit from longitudinal designs that capture dynamic changes in capital structure over time, as well as from cross-country comparative analyses that account for institutional and policy differences across agricultural systems. Another limitation was the use of ORBIS data, which may restrict sampling representation, especially for small and emerging enterprises. Future research, therefore, can operate on the long-run observation methodology of a wider data sample, demonstrating a more profound insight into the development of the capital structure of enterprises over time.

This article does not contain any studies with human participants or animals performed by the authors. Extracting and inspecting publicly accessible files (scholarly sources) as evidence, before the research began no institutional ethics approval was required.