It is calculated by dividing total liabilities by total equity.
What is capital structure formula?
How Is Capital Structure Calculated? 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.
What is an example of capital structure?
1 This mix of debts and equities make up the finances used for a business's operations and growth. For example, the capital structure of a company might be 40% long-term debt (bonds), 10% preferred stock, and 50% common stock.
What is a capital structure ratio?
Ratios Applied to Capital Structure Referred to as the long-term debt to capitalization ratio, it's calculated as long-term debt divided by (long-term debt plus shareholders' equity). It delivers key insights into a company's capital position.