FINANCIAL

STRUCTURE
RATIO
R E P O RT I N G B Y: C H E R RY L I E M A L I WAT &

MARIELLE KIM LEGASPI

Financial Structure Ratio refers to the relationship between the debt and
equity of the business. This relationship determines who really owns the
business, the owner or the creditor.

Most of the successful entrepreneur started their business without

adequate capital. With great propensity in taking risk, they resort on
capital borrowing from banks and lending institution. Engaging in
capital or investment borrowing is a healthy practice in business
community. However, you have to take precautionary measures before

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resorting to it. Familiarity with Financial Structure ratio will help you
decide if your enterprise can go on to borrowing money. One way of
looking at financial structure is to focus on the proportion of the
business represented by the owner's investment. This is the ownership
ratio

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WHAT IS
FINANCIAL
STRUCTURE
RATIO?

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 5 ESSENTIAL
FINANCIAL RATIOS
FOR EVERY
BUSINESS
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 5 ESSENTIAL FINANCIAL
RATIOS FOR EVERY BUSINESS

1) Liquidity 2) Leverage 3) Efficiency 4)

ratios ratios ratios Profitability
Companies use
liquidity ratios to
Companies Efficiency ratios
measure working often use short ratios show A business’s

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capital and long-term how effectively profit is
performance – the debt to finance a company uses calculated as
money available to business working capital net sales less
meet your current,
short-term
operations. to generate expenses.
obligations . sales.

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5) Market Value ratios

Market value ratios are used to measure how

valuable a company is. These ratios are usually
used by external stakeholders such as investors or

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market analysts but can also be used by internal
management to monitor value per company share.

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 THANK YOU!

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