What Are the Different Types of Capital Repayment?

The generalized capital structure refers to the composition of the source of all funds of an enterprise and its proportional relationship, including not only sovereign capital, long-term debt funds, but also short-term debt funds.

Corporate capital structure

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Generalized

The capital structure refers to the composition of the source of various funds of an enterprise and its proportional relationship.

Narrowly defined capital structure

The relationship between corporate capital structure and asset structure:

I. Capital structure refers to the composition of various capitals and their proportional relationship in the total capital of an enterprise.

That is, the proportion of debt capital in the total capital of an enterprise. Under certain conditions, the capital structure that minimizes the average cost of capital and maximizes the value of an enterprise is the best capital structure for an enterprise.

2. The asset structure of an enterprise is the structure of capital occupation after resources are allocated and used by an enterprise after raising capital, including the composition and proportion of long-term and short-term assets, as well as the internal proportion of long-term and short-term assets.

Third, corporate asset structure is one of the factors affecting the capital structure.

Four factors that influence the capital structure:

1. The stability and growth rate of the company's operating conditions;

2.The financial status and credit rating of the enterprise;

3.Enterprise asset structure;

4. Attitudes of corporate investors and management authorities;

5. Industry characteristics and enterprise development cycle;

6. Tax policy and monetary policy of the economic environment.

V. The impact of corporate asset structure on capital structure includes:

1.Enterprises with a large number of fixed assets-mainly raising funds through long-term liabilities and issuing stocks;

2.Enterprises with more current assets-rely more on current liabilities to raise funds;

3. Assets are suitable for mortgaged enterprises-more liabilities;