This article outlines the following factors and steps that should be taken into account when determining an ideal capital structure:
- Financial Analysis – Creating an in depth financial analysis to better understand your current position, which should include financial leverage, short & long-term capital needs, and fixed assets
- Preparation for Unforeseen Events – Organizations especially those acquiring need to consider how macroeconomic factors such as natural disasters, large drops in demand, or a global credit crunch can have a profound effect on their overall position.
- Anticipating Interest Rate Change – Interest rate risk is a key factor in determining an ideal capital structure. The key question is what interest rates will the organization or acquirer be taking on, fixed, floating, or interest rate floors.