Important ratios used to analyze capital structure include the debt ratio, the debt-to-equity ratio, and the long-term debt to capitalization ratio. Credit agency ratings help investors assess the quality of a company's capital structure.
What are the 5 types of ratio analysis?
What Are the Types of Ratio Analysis? Financial ratio analysis is often broken into five different types: profitability, solvency, liquidity, turnover, and earnings ratios.
How do you analyze capital structure?
You can calculate your company's capital structure by examining your debt-to-equity ratio, which you determine by dividing your liabilities (level of debt) by your total equity. The difference between your assets and liabilities determines your working capital or the amount of liquidity (current cash flow) you have.
Which financial ratio reflects capital structure?
In ratio analysis, the debt to equity ratio is widely considered the best reflection of a company's capital structure.