Corporate Financing Methods and Capital Structures

Own Resources and Equity

Own Resources (REC.PROP): These are stable and not repayable (not back of shank). They are the last to be charged in case of bankruptcy risk by partners.

• Capital: Partner contributions formed in the society to produce capital and extensions.
• Reserves: Distributed profits for internal financing.
  • Legal: Terms set by law.
  • Statutory: Fixed by the company status.
  • Voluntary: Obtained from benefits.
  • Extraordinary: State and private subsidies.
• Amortization (Leak): The value that fixed assets (immobilitzat) lose in the production process due to use or obsolescence.
• Provisions: Part of the company results established as a fund to meet losses that have been produced or future expenses (indemnities, taxes).

Long and Medium-Term External Resources

External Resources (REC.ALIENS ML / T): Economic disposition for the exercise that must be returned plus interest.

• Long-term Loans (M.llo / t): Returns to credit institutions plus interest.
• Borrowings and Bonds: Securities (good obligations) issued by companies and acquired by individuals for interest. Used by large banks and corporations.
• Leasing: A financing system through companies that allows the incorporation of active lease elements in exchange for fees.
• Renting: Long-term rental. The lessee agrees to a monthly payment. The leasing company commits to maintenance, all-risk insurance contracts, and at the end, the option to renew or enlarge.

Short-Term External Resources

Short-Term External Resources (REC: Alien C / T): Used to finance the operating cycle.

• Short-term Loans (c / t): Loans for less than one year with bank interest returns.
• Credit Accounts or Policies: Used when a company wants to have financing while predicting possible needs without knowing the exact future quantity. A contract is made with an entity that offers a reduced current account. The company signs checks and interest is paid on the amount used, not the total credit limit prepared.
• Trade Credits: Automatic financing when companies delay payments for goods provided while benefiting from returns.
• Discounting Effects: The need for cash from a bill before maturity. The bank advances the money and removes interest for the remaining days. If the end customer does not pay, the bank charges the company.
• Factoring: Selling all credit rights (invoices, bills) to a company called a "factor," which provides immediate liquidity and avoids the problem of unpaid debts, as the company does not respond to the non-payment of their customers.
• Spontaneous Sources of Financing: These involve no negotiation stage. Examples include monthly charges for employees, finances, and social security.