Details

  • Service: Advisory, Transactions & Restructuring, Transaction Services
  • Date: 12/4/2013

Determine an Ideal Capital Structure 

Optimizing a company’s capital structure is critical to its ability to achieve near and long-term growth objectives. The optimal capital structure should ensure companies retain sufficient capital levels during both good times and bad.
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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.
 

Contact

 

Daniel Tiemann
Americas Transactions & Restructuring Lead
312-665-3599