A corporate entity needs to have a unique blend of different capital sources so that it receives good returns and overcomes the losses it went through during the times of stress. A company is said to have a sound capital structure when the proportion between the equity and debt is such that it maximizes the returns for the equity share holders.

This kind of structure varies from one company to the other, depending upon the size and nature of the company operations, efficiency of its management and availability of the funds from diverse sources. If you are also looking for ways to increase your company’s returns, then you should have a clear understanding of capital gearing. Read More »