| the apportionment of all the financial resources of a business, in equity, bonds, etc. |
Capital Structure
The means by which a firm is financed.
Investopedia Commentary
A firm can finance operations through common and preferred stock, with retained earnings, or with debt. Usually a firm will use a combination of these financing instruments.
The proportion of short and long-term debt is considered when analyzing capital structure. And, when people refer to capital structure they are most likely referring to a firm's debt-to-equity ratio, which provides insight into how risky a company is. Usually a company more heavily financed by debt poses greater risk.
Related Links
Debt Reckoning
When Companies Borrow Money
Advanced Financial Statement Analysis
See also: Balance Sheet, Debt, Debt Financing, Debt/Equity Ratio, Equity, Equity Financing, Long Term Debt, Retained Earnings, Shareholders Equity