Capital Structure
Definition
The mix of debt and equity a business uses to finance its operations and growth. The balance affects risk, cost of capital and returns to owners.
Related Terms in Business Terms
Dividend Declaration
The formal decision by a company's board or shareholders to distribute part of its profits to shareholders. Once declared, a dividend becomes a liability until it is paid.
Bill of Exchange
A written, signed order by one party directing another to pay a fixed sum to a third on demand or at a set future date. It is a negotiable instrument used to formalise and transfer trade credit.
Promissory Note
A written promise by one party to pay a definite sum to another on demand or at a specified date. Unlike a bill of exchange it is made by the payer rather than ordering a third party to pay.
MRR (Monthly Recurring Revenue)
The predictable revenue a subscription business earns each month. Calculated by multiplying the number of paying customers by the average revenue per user (ARPU). Key SaaS metric.
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