Finance · Funding and capital · Component
Capital structure
The current mix of equity and debt, who holds each part, and the mix the organisation has decided to aim for.
The deliverable
What it is
Capital structure is often known in pieces — the ownership table with the company secretary, the loans with the finance team — and rarely seen whole. Putting them side by side shows how much of the business is owed to whom and when.
Modigliani and Miller’s result is useful here as a prompt. Whatever makes the mix matter for this business — tax treatment of interest, the cost of distress, the signal a share issue sends — is the reason behind the target, and it should be written down.
One level in
What it is made of
Each element is a constituent part of the component. Follow one to see the attributes it carries.
Ownership table
Who holds the equity, in what proportion, and which classes of share carry which rights.
3 attributes: Holder · Share held · Share class
LearnDebt facilities
Each loan, overdraft or other borrowing, with lender, amount, cost and the date it falls due.
4 attributes: Lender · Amount · Maturity · Interest rate
LearnTarget mix
The proportion of debt the organisation intends to carry, and the reasoning that supports that level.
3 attributes: Target debt share · Reason · Reviewed
Learn
List maturities on one timeline. Facilities that fall due together turn an ordinary renewal into a refinancing event.
The other components in funding and capital
Funding plan
The capital the organisation expects to need over the planning horizon, when it needs it, and the sources under consideration.
LearnCovenant and rights register
Everything a capital provider can require, restrict or trigger, held in one place with the current headroom against each.
Learn