What Is Capital Structure

Topics: Generally Accepted Accounting Principles, Finance, Economics Pages: 2 (268 words) Published: April 18, 2015
What is Capital Structure?

Capital structure is a mix of long-term liabilities, short term liabilities like bank notes, common equity and preferred equity that makes up the funds with which a business (Morrisons) finances its operations and is growth.

The capital structure of a business is essentially the right side of its balance sheet.

Financial structure can be made with relevance to turnover and operating profits, capital expenditure, earning per share, tax payable, return to shareholders and dividend cover on the balance sheet (Morrisons) so based on these figures you can say what kind of capital structure they have, good or bad.

Turnover and operating profit -
2008/09
2009/10
Changes
Turnover
£14528m
£15410m
6.07%
Operating profit
£671m
£907m
35.17%
Capital expenditure - the capital expenditure has increased by £228m and now is £906m. This is due to the recent buying of the new co-operative and Somerfield stores at a cost of £223m and a refurbishment cost of £102m. Apart from this we can see a fall in the previous made capital expenditure. This is a healthy growth projector.Earnings per share - the earnings per share has increased from 17.4pence per share to 22.8 pence per share. This is mainly due to the increase in underlying profits. There have been no other significant factors that would affect the earning per share. Find out more from UK Essays here: http://www.ukessays.com/essays/finance/capital-structure-and-cost-of-capital-for-morrisons-finance-essay.php#ixzz3LmIEznJ5 All information is on the link above.

http://expectingvalue.com/shares/morrisons-mrw (goes into depth with graphs about revenue and operating) can include in appendice.
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • CAPITAL STRUCTURE Essay
  • Capital Structure Theory Essay
  • Capital Structure Essay
  • Capital Structure Essay
  • Capital Structure Essay
  • Capital Structure Essay
  • Capital Structure Essay
  • Capital Structure Essay

Become a StudyMode Member

Sign Up - It's Free