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• Compare And Contrast The Current Capital Structures Of Companies

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Compare and contrast the current capital structures of Companies A and B, and describe how these have charged over the last five years. Apply established theories, of capital structure to describe the changes overtime.

The report has settled down on the following two companies that meet all the criteria for the comparative analysis. Aveva is a technology corporation, specializing mainly on technological services such as software provision, installation and maintenance. The second company is Drax, plc which is a power company, specializing in electricity production and selling it to businesses. I do recognize that these two companies are in unique sectors but all fit for the analysis of the question under study.
Capital structure is a crucial …show more content…

2013
Total Assets (£ 000) = 354,621
Total Liabilities (£ 000) = 103,015
Equity (£ 000) =251,606
Debt-to-Equity Ratio (D/E) = Debt / Shareholders Equity = Debt / (T.A – T.L)
 103,015/ (354,621-103,015)
 103,015/251,606
 thus the D/E ratio is 0.41 which translates to 41.0%
2014
Total Assets (£ 000) = 277,890
Total Liabilities (£ 000) = 92,913
Equity (£ 000) =184,977
Debt-to-Equity Ratio (D/E) = Debt / Shareholders Equity = Debt / (T.A – T.L)
 92,913/ (277,890-92,913)
 92,913/184,977
Therefore the D/E ratio is 0.50 which translates to 50.0%
FY 2014-2015
2015
Total Assets (£ 000) = 293,360
Total Liabilities (£ 000) = 103,430
Equity (£ 000) =189,930
Debt-to-Equity Ratio (D/E) = Debt / Shareholders Equity = Debt /( T.A – T.L )
 103,430/(293,360-103,430)
 103,430/189,930
Thus the D/E ratios is 0.54 which translates to 54%

CALCULATIONS FOR DEBT TO EQUITY RATIO FOR DRAX PLC
FY 2011-2012
2011
Total Assets (£ M) = 2,009.4
Total Liabilities (£ M) = …show more content…

Equity (£ M) =1,303.4
Debt-to-Equity Ratio (D/E) = Debt / Shareholders Equity = Debt /( T.A – T.L )
 706.4/( 2,009.4-706.4)
 706.4/1,303.4 Thus the Debt-to-Equity Ratio is 0.54, which translates to 54%
2012
Total Assets (£ M) = 2,258.4
Total Liabilities (£ M) = 781.1
Equity (£ M) =1,477.3
Debt-to-Equity Ratio (D/E) = Debt / Shareholders Equity = Debt / (T.A – T.L)
 781.1/(2,258.4-1,477.3)

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