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 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