Capital Structure: CNBC Explains
By: CNBC Explains
Capital structure is important to understanding how a business is run and financed, and can be easily evaluated by looking through a corporate balance sheet. Capital structure refers to the relationship between a company’s assets and liabilities, including how the assets are funded and the amount of debt managed by the firm. Salman Khan of the Khan Academy explains the concept with a side-by-side comparison of companies with different capital structures.
From this video, you’ll understand:
- The basics of corporate capital structure
- How capital structure affects owners’ equity
Want to be an informed investor? Buckle down and learn to read corporate balance sheets. You need to know how to scrutinize overall expenses and revenues in these corporate snapshots i order to to discern profitability and earnings. Salman Khan of the Khan Academy runs through a hypothetical income statement and identifies what each number means.
