The term capital structure should not be confused with Financial structure and Assets structure. While financial structure consists of short-term debt, long-term debt and share holders’ fund i.e., the entire left hand side of the company’s Balance Sheet. But capital structure consists of long-term debt and shareholders’ fund.

So, it may be concluded that the capital structure of a firm is a part of its financial structure. Some experts of financial management include short-term debt in the composition of capital structure. In that case, there is no difference between the two terms—capital structure and financial structure.

So, capital structure is different from financial structure. It is a part of financial structure. Capital structure refers to the proportion of long-term debt and equity in the total capital of a company. On the other hand, financial structure refers to the net worth or owners’ equity and all liabilities (long-term as well as short-term).

Capital structure does not include short-term liabilities but financial structure includes short-term liabilities or current liabilities.

Assets structure implies the composition of total assets used by a firm i.e., make-up of the assets side of Balance Sheet of a company. It indicates the application of fund in the different types of assets fixed and current.

Assets structure = Fixed Assets + Current Assets.

The term capitalisation means the total amount of long-term funds at the disposal of the company, whether raised from equity shares, preference shares, retained earnings, deben­tures, or institutional loans.