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Guide To Analysing Companies, Fifth Edition by Bob Vause

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9 Capital and valuation

A NOTHER IMPORTANT ASPECT in the overall assessment of a company’s financial position is its capital structure and the way this is viewed by providers of finance. This chapter analyses sources of finance and the performance measures applied by investors.

A useful first step in the analysis of a company’s financial position is to use the balance sheet as a basis for seeing how the company is financed: the proportions of the total capital employed provided by shareholders and other sources of finance.

Equity and debt

A balance sheet has three broad classifications of liabilities: equity (shareholders’ funds), non-current liabilities (long-term creditors) and current liabilities (short-term creditors). These reflect ...

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