Generally speaking, capital structure refers to the proportional relationship between equity capital and creditor's rights capital, which reflects the financial relationship of enterprises under the condition of market economy, that is, the interest relationship between shareholders, bondholders and operators, which is formed through investment and lending with capital and credit as the link.
In a sense, capital structure is also a structural arrangement of property ownership, and property ownership often ultimately corresponds to the right to income, so capital structure is tied to property arrangement, or capital structure determines the structure of property arrangement.
The proportional relationship between corporate liabilities and equity is usually expressed by the ratio of liabilities or the ratio of liabilities to total assets. Western financiers have done a lot of theoretical and empirical research on capital structure, but there are still many differences until now.
The capital structure here refers to the liabilities of the enterprise. Whether the capital structure is reasonable or not directly affects the financial situation of enterprises. The debt ratio should not exceed 50%, and the ratio of long-term liabilities to short-term liabilities should be appropriate.
Expand the impact of data capital structure
First of all, maintaining a reasonable capital structure is conducive to improving enterprise value. Debt financing can bring financial leverage and tax savings to enterprises. When the profit rate before interest and tax of total assets is greater than the debt cost rate, enterprises can obtain financial leverage income through debt financing and improve enterprise value. Debt financing by enterprises can save taxes and improve enterprise value.
The second is to influence the enterprise value by influencing investors' judgments and investment decisions on the business conditions of the enterprise. Capital structure transmits information about enterprise value to external investors and affects external investment decisions, thus affecting enterprise value. Managers holding shares and taking the initiative to buy back shares are regarded by investors as a signal of good prospects for enterprises, because managers have taken risks.
The third is to influence the enterprise value by influencing the corporate governance structure; Debt financing can encourage enterprise managers to work hard, choose the right behavior, send a signal of operating performance to the market, and help external investors make a correct judgment on the future operating conditions of enterprises.
Baidu Encyclopedia-Capital Structure