Capital Structure VS Financial Structure

 Capital Structure –

It refers to the makeup of a firm’s capitalization.

It represents the mix of different sources of long-term funds like an equity, shares, preference shares, long term loans, retained earnings etc. in short it covers the TOTAL CAPITALIZATION of the company.

Financial Structure –

It refers to the balance between all of the company’s liabilities and its equities.

So it is more concerned about the “Liabilities + Equities” side of the Balance Sheet.

Note - Financial structure is a part of the Capital structure but Capital structure is not a part of the Financial structure.