Explains how the use of borrowings can expose the organization to added risk and cost, thereby reducing profit (as financial capital is imperative).

 

To demonstrate the impact of using optimum levels of debt capital in the overall mix of financial or profit levers that can be 'pulled'

 

1. Reviewing pros and cons of debt and equity

2. Measuring the current cost of capital

3. Reviewing current market circumstances

4. Analyzing the current position

5. Assessing the potential for better use of debt capital

6. Considering future options

7. Expanding business activities

8. Obtaining lower interest rates

9. Assessing different capital structure

10 .Benchmarking borrowing structure

11. Monitoring company and market changes