Capital Employed is the total amount of capital that a company uses to generate profits and includes shareholder's equity and long-term debt, or the sum of fixed and net current assets. This metric is pivotal in ratio analysis for assessing the efficiency and profitability of a company's capital investments.
Capital transactions refer to significant financial activities involving things like share capital and reserves, long-term debt capital, or fixed assets of a company, as opposed to revenue transactions which are common, operational activities.
The Debt-to-Equity Ratio is a financial metric that indicates the relative proportion of shareholders' equity and debt used to finance a company's assets.
The financial structure of a company refers to the specific mixture of long-term debt and equity that it uses to finance its operations. Understanding financial structure is crucial for evaluating financial health and making strategic business decisions.
The Fixed-Asset to Equity-Capital Ratio is a financial metric used to assess a business's ability to satisfy long-term debt by comparing the value of its fixed assets to its equity capital.
The Fixed-Charge Coverage Ratio measures a firm's ability to meet its fixed financial obligations, including interest payments on long-term debt and other contractual commitments, relative to its earnings before interest and taxes.
Funded debt refers to debt that is due after one year and is formalized by the issuing of bonds or long-term notes. It often involves a sinking fund to ensure the debt can be retired systematically.
Long-term debt, also known as long-term liability, refers to loans and financial obligations that are due in more than a year. These obligations often include bonds and notes payable, with periodic interest payments and the principal due upon maturity.
Long-term liabilities are any financial obligations or debt that are not payable on demand or within one year. These can include loans, bonds payable, mortgages, and other financial obligations.
Overcapitalization arises when a company has more capital than it can efficiently use in its operations, often leading to financial inefficiencies such as excessive interest charges or diluted dividends.
Total capitalization refers to the comprehensive capital structure of a company, including long-term debt and all forms of equity. It reflects the total amount of capital a company has raised through debt and equity instruments to fund its operations and growth.
