Capital Structure, Financial Structure, and Assets Structure

Capital Structure: Capital structure refers to the proportion of long-term debt and equity in the total capital of a company. It consists of long-term debt and shareholders' equity.

Financial Structure: Financial structure includes short-term debt, long-term debt, and shareholders' equity, comprising the entire left-hand side of the company's Balance Sheet. It encompasses both short-term and long-term liabilities.

Assets Structure: Assets structure represents the composition of a company's total assets, which includes fixed assets and current assets. It indicates how the company's funds are allocated among different types of assets.

The relationship between these structures can be expressed in formulas:

• Capital Structure: Capital Structure = Long-term Debt + Shareholders' Equity

• Financial Structure: Financial Structure = Short-term Debt + Long-term Debt + Shareholders' Equity

• Assets Structure: Assets Structure = Fixed Assets + Current Assets

It's important to note that while capital structure is a subset of financial structure, assets structure focuses on the composition of a company's assets. Each structure provides valuable insights into different aspects of a company's financial position and operations.

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