ASPECTS OF THE ANALYSIS OF THE CAPITAL STRUCTURE OF THE ENTERPRISE

Abstract

Capital structure is a key indicator for the position and development of
the organization. In general, it expresses the equity to borrowings ratio. When examined in
details, the capital structure expresses the different ratios of equity elements to long- and
short-term borrowing elements used for the organisation’s activity. The capital structure
has direct effect on the organisation’s property structure, liquidity, solvency, equity
profitability, financial stability and development rate. This makes the issue of capital
structure analysis and assessment crucial at every stage of organisation’s development
process.

This report covers the methodology for organisation’s capital structure analysis. The
effect of direct factors on the changes of capital structure are analyzed and assessed. In
parallel, it is also examined as a factor affecting the organisation’s growth rate. The report
focuses on the methodology for analysis and assessment of the impact of the
organisation’s capital structure changes on its growth rate.