Capital structure refers to the value composition and proportional relationship of various types of capital of an enterprise, which is the result of the financing combination of an enterprise in a certain period. In a broad sense, capital structure refers to the composition of all capital of an enterprise, including not only sovereign capital, long-term debt capital, but also short-term debt capital. Capital structure in the narrow sense refers to the composition and proportion of sovereign capital and long-term debt capital. The capital structure is usually referred to as the capital structure in the narrow sense. The specific content of the capital structure includes the following aspects:
1. Equity structure
The shareholding structure refers to the composition of the shareholders of an enterprise and their proportional relationship. Including the type of shareholder, shareholding ratio, shareholding concentration, etc. Equity refers to the rights and interests of the holder corresponding to the proportion of the holder and the right to bear certain responsibilities. The right that can be asserted against the company based on the status of a shareholder is equity. The shareholding structure is the basis of the corporate governance structure, and the corporate governance structure is the specific operation form of the equity structure. Different shareholding structures determine different corporate organizational structures, which determine different corporate governance structures, and ultimately determine the behavior and performance of enterprises. The equity structure indicators include whether the shareholders' meeting of the enterprise is standardized, whether the equity is concentrated, the composition of shareholders, whether there is a control relationship, and the protection of the rights of small and medium-sized shareholders.
2. Creditor's rights structure
The creditor's rights structure refers to the composition and proportional relationship of various long-term and short-term liabilities of an enterprise. Specifically, it includes the proportion of short-term liabilities, the proportion of long-term liabilities, the composition of creditors, the method of debt guarantee, the type of bonds and innovations, etc. Short-term liabilities include commercial credit, short-term borrowings, etc.; Long-term liabilities include long-term borrowings, bond issuances, and long-term payables. Creditors can be banks, insurance companies, ** companies, or other institutions, or individuals. Creditor's rights can be divided into credit guarantee, mortgage guarantee, pledge guarantee, etc. The types of bonds can be divided into ordinary bonds, convertible bonds, etc.
3. Financial leverage
Financial leverage refers to the ratio at which a company uses debt to raise funds. Financial leverage is achieved by expanding the financial leverage ratio, which refers to the ratio of after-tax profits to interest expense. The higher the ratio, the greater the financial risk of the company, and vice versa. The financial leverage effect can give full play to the financial leverage of the enterprise and increase the income of the enterprise; But it can also lead to insolvency or even bankruptcy. Therefore, the rational use of financial leverage can increase the profitability of enterprises, but it also needs to be carefully controlled financial risks.
Fourth, the cost of capital
The cost of capital refers to the cost paid by a business to raise and use funds, including financing expenses and capital expenses. Financing expenses refer to various expenses incurred in the process of raising funds, such as lawyer fees, credit evaluation fees, notary fees, etc.; The cost of capital refers to the expenses paid by the enterprise for the use of funds in production and operation, such as interest expenses. The cost of capital is an important basis for investors' investment decisions, as well as for corporate financing and investment decisions. Enterprises can reduce the cost of capital and improve the economic benefits of enterprises by reasonably arranging financing channels and methods.
5. Property rights structure
The property rights structure refers to the composition and proportional relationship of property rights of different natures of enterprises. The property structure includes ownership, possession, domination, and income rights. The setting of the property rights structure should be conducive to improving the efficiency and management level of the enterprise, and to achieving the long-term development goals of the enterprise. A reasonable property rights structure can improve the efficiency of resource allocation and promote the development and growth of enterprises.
SixCapital restructuring
Capital structure adjustment refers to the adjustment of the capital structure of an enterprise according to its own development strategy and market environment, so as to optimize the capital structure, reduce financial risks and improve the value of the enterprise. Recapitalization can be achieved in a variety of ways, such as issuing new shares, buying back**, repaying debts, etc.
The above six aspects are the main content of the capital structure, and enterprises need to comprehensively consider these factors to formulate a reasonable capital structure strategy to achieve the long-term development goals of the enterprise. Search Topic Full Time Challenge in January