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What is the basic factor and concept to know company's capital requirement?

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Question added by Yasir Ilyas Malik , CREDIT ANALYST - Commercial & Corporate , NATIONAL BANK OF PAKISTAN
Date Posted: 2016/12/01
Magdy Saad
by Magdy Saad , Head of Credit Risk , Kirnaf Finance Company

Dear This a part of “Capital Structure studies” it’s a very deep science you should to read it carefully

But there are 6 important elements which briefly reply to your question

1-    Business Risk Excluding debt “debt ratio”. 

2-    Growth Rate

3-    Market Conditions

4-    Financial Flexibilitycompanies have no problem raising capital when sales are growing and earnings are strong. However, given a company's strong cash flow in the good times, raising capital is not as hard.

5-    Tax Exposure 

 

6-    Management Styleaggressive or conservative 

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