What is capital structure in SAP ORG-LX-T9N - Team: Corporate Translation?

SAP Term: capital structure

• Component: ORG-LX-T9N

• Component Name: Team: Corporate Translation

• Description: The combination of equity, debt, or hybrid securities used by a corporation to finance its assets.

Smart SAP Assistant

• Key Concepts: 
  Capital structure is a term used to describe the mix of debt and equity that a company uses to finance its operations. It is the composition of long-term debt, specific short-term debt, common equity and preferred equity. The capital structure is important because it affects the risk and value of a company. 
  
  How to use it: 
  The capital structure of a company can be used to determine the risk associated with investing in the company. Companies with higher levels of debt are more risky than those with lower levels of debt. Companies with higher levels of equity are less risky than those with lower levels of equity. 
  
  Tips & Tricks: 
  When analyzing a company's capital structure, it is important to consider the company's ability to service its debt. Companies with high levels of debt may be more likely to default on their loans if they are unable to generate enough cash flow to service their debt. 
  
  Related Information: 
  The capital structure of a company can also be used to determine the value of the company. Companies with higher levels of equity tend to have higher values than those with lower levels of equity. Additionally, companies with higher levels of debt tend to have lower values than those with lower levels of debt.