Filter by Categories
Accounting
Banking

Financial Analysis




Capital Shrink


The process that involves reducing a company’s capital through a retirement of debt or equity. To that end, the free cash flow (FCF) is typically used (i.e., the difference between a company’s cash flow and its capital expenditures (CAPEX). For example, if a company wants to decrease its capital (say it is currently capitalized at $100 million) by 20% for whatever reason then it may either repurchase an amount of its shares from the secondary market equal to $20 million or retire an equivalent amount of its debt. It may also rely on both repurchasing its stock and retiring its debt (e.g. $10 million in stock repurchase and $10 million in debt repayment).



ABC
The financial analysis of companies is essentially undertaken with the aim to assess their performance in light of their objectives and strategies ...
Watch on Youtube
Remember to read our privacy policy before submission of your comments or any suggestions. Please keep comments relevant, respectful, and as much concise as possible. By commenting you are required to follow our community guidelines.

Comments


    Leave Your Comment

    Your email address will not be published.*