Question
How is "Capitalisation" different from "Capital Structure"?
|
Basis
|
Capitalisation
|
Capital Structure
|
||||||||
|
Meaning
|
Capitalisation is the total amount of all longterm funds available to a company and includes undistributed profits/ retained earnings.
|
Capital structure is the composition or mix of different types of long-term capital whether owner's funds or borrowed funds.
|
||||||||
|
Composition
|
It includes shares, debentures, long - term loans and free reserves.
|
It includes in the following pattern:
|
||||||||
|
Determined by
|
It is determined by various factors like cost of capital, market conditions, trading on equity.
|
It is determined by earning capacity of the company.
|
Generate a complete, print-ready paper with questions like this in minutes — across 16+ boards, with answer keys.