Capital structure is a core area within financial management. It refers to the composition or make-up of a company’s capitalization. Essentially, it represents the specific mixture or mix of long-term debt and equity that a firm uses to finance its assets and meet its long-term investment requirements. The term “capital Read more
The term capital broadly refers to the total investment of the company in terms of money and assets. It is also called the total wealth of the company. When a company invests a large amount of finance into the business, it is called capital. Capitalization is a more specific concept. Read more
Working Capital is a crucial concept in financial management, representing the capital needed to meet the day-to-day transactions of a business concern. It is also described as the funds available for day-to-day operations of an enterprise. Unlike Fixed Capital, which is invested in long-term assets [previous conversation], working capital is Read more
Fixed Capital is a fundamental concept in financial management, representing the capital required for meeting the permanent or long-term purposes of a business concern. It is distinct from working capital, which is needed for short-term, temporary requirements. Purpose and Nature The primary purpose of Fixed Capital is to fund the Read more
Estimating capital requirements is a fundamental part of financial planning for a business. This process involves determining the amount of funds a firm needs to operate its business. Capital refers to the total investment of the company in terms of money and assets, also known as the total wealth of Read more
Introduction to Financial Planning and Capital Structure Financial Management is a managerial activity focused on the planning and controlling of a firm’s financial resources. It involves crucial financial decisions, including investment decisions (Capital Budgeting), financing decisions (Capital Structure), dividend decisions, and working capital management decisions. Financial Planning and Capital Structure Read more