capital structure


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Capital structure

The makeup of the liabilities and stockholders' equity side of the balance sheet, especially the ratio of debt to equity and the mixture of short and long maturities.

Capital Structure

How a company finances its operations. The three most basic ways to finance are through debt, equity (or the issue of stock), and, for a small business, personal savings. Capital structure usually refers to how much of each type of financing a company holds as a percentage of all its financing. Generally speaking, a company with a high level of debt compared to equity is thought to carry higher risk, though some analysts do not believe that capital structure matters to risk or profitability.

capital structure

capital structure

the composition of a JOINT-STOCK COMPANY'S long-term capital which reflects the source of that capital, for example SHARE CAPITAL and long-term LOAN CAPITAL. See CAPITAL GEARING.

capital structure

See capital stack.
References in periodicals archive ?
Capital structure refers to the mix of debt and equity used by a firm in financing its assets.
According to the modern literature of financial security, the agency conflicts are considered as determinant factor of the capital structure of the companies.
The capital structure of a business is the mix of types of debt and equity the company has on its balance sheet.
The key to obtaining capital is layering each piece of the capital structure together so that the completed capital stack can meet the owner's needs.
Financial managers should all be familiar with the textbook approach to a company's capital structure (its mix of debt and equity).
Dallas-based Capital Senior Living Corporation (CSL) is taking steps to simplify its capital structure, capture 100 percent of the appreciation of its assets, continue its growth, and maximize value to shareholders through enhanced cash flow and higher net asset values.
Furthermore, we are laying out the conceptual foundations of a capital structure theory for the MNC, taking consideration of previous empirical findings.
The FASB issued an exposure draft, Earnings per Share and Disclosure of Information About Capital Structure, in January 1996.
If the corporate taxpayer did not acquire a capital asset or change the capital structure as a result of the transaction, but merely preserved or protected existing assets and rights or contracted the scope of its activities, the transaction may be considered the equivalent of a partial liquidation rather than a reorganization of the corporate structure.
While AGC has aggressive leverage due to the absence of preferred stock in its capital structure and the regular use of short-term debt, the ratings recognize AGC's capital structure is superior to the typical non-utility generating company.
HPHC's capital structure is one-third comprised of surplus notes, as compared to its peers, whose capital structures do not contain contractual repayment provisions to external parties.