What is the financial structure?

The financial structure or financial structure is the way the company's assets are financed. The financial structure is displayed on the right side of the company's financial balance sheet. The company's financial situation is listed, starting with the equity capital and then by providing liabilities from long -term obligations, such as banking loans for short -term obligations such as the money owed by customers. The capital itself should represent the largest part of the company's financial means. If the company has only a small amount of capital, it can get into problems with loan interest payments. When the company has to pay high interest rates, its obligations will increase without increasing its assets. The company is then threatened by overloading the debt.

business partners of the company concerned are also interested in its financial structure. They want to know if the company will be able to pay for goods and services in the future. For this reason, companies must publish their balance sheets. Any other company that is interestedThus, it can look at its financial structure about the development of a business relationship with the company. The interviewing company can evaluate the ability of the second company to fulfill future financial obligations.

Banks will also look at the company's financial structure when the company asks for a loan. If the share in the share capital makes a large part of the total capital, the bank is likely to grant a loan. On the other hand, if the company already has a high percentage of liabilities on the part of the financial structure in the balance sheet, it will probably not get another loan.

should be the interest of every society to have a healthy financial structure. It should also be maintained in the long term. If the Company should come into the situation of debt overload, it is likely that it will become insolvency.