Capital Leverage and Structure
Capital Leverage and Structure
Step 1: Research
Consider the following scenario. You just accepted an opportunity to manage and operate a business that you do not know much about. What financial information would you need to analyze the company’s capital structure and how could it be used to advance business operations?
Perform preliminary research from the course readings and external sources (relevant internet articles, magazines, periodicals, etc.) about analyzing a company’s Capital Structure and advancing business operations.
The Written analysis should include a minimum of three references cited within the content of the paper and the reference page according to APA guidelines.
Step 2: Introduction and Description
Begin the essay with an introduction that describes what Capital Structure and capitalization is and why it is important.
Describe and Detail:
The sources and value of the various forms of leverage that are used in companies, explaining how any debt, equity, or assets are used to further the business operations. This should include the effect that leverage can have directly or indirectly on operational funds and ultimately on the operations.
The overall capital structure, including how equity, namely stocks, is held, other capital resources, and cash. How each of these items affects operations, positively or negatively, should be discussed.
How these can be used to advance the business operations, mostly focusing on how the capital structure affects available funds for operations, such a payroll, inventory costs, marketing costs, cost-of-sales and support etc.
