A company’s financial health largely depends on how it structures its capital. The right mix of debt and equity can dictate a firm’s profitability, resilience, and ability to navigate economic uncertainty. Capital structure management is essential to financial planning, influencing investment decisions, risk exposure, and operational efficiency. Businesses can optimize resources, minimize costs, and enhance long-term stability by designing a well-balanced capital structure. Defining Capital Structure and Its Role in Business Success Capital structure refers to the proportion of debt and equity a company utilizes to finance its activities. A well-planned capital structure provides the financial backbone for business expansion, operational continuity, and profitability. Companies must balance borrowing funds and utilizing shareholder equity to create a sustainable financing strategy. Debt financing allows businesses to raise capital through loans, bonds, or credit lines. This approach b...
Comments
Post a Comment