Capital structure is equal to financial structure minus current liabilities.

Question

Quizplus · Accepted Answer

Capital structure consists of a company's long-term debt, preferred stock, and common stock equity, whereas financial structure includes the entire right-hand side of the company's balance sheet, which encompasses both long-term and short-term debt, as well as all types of equity. Therefore, capital structure can be seen as the financial structure minus current liabilities, which are part of the short-term debt.

Capital Structure Is Equal to Financial Structure Minus Current Liabilities