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Does the mixture of debit and equity in a firm's financial structure matter? Why? The capitalization (Debit to equate) structure of a firm depends on a number of factors. The goals of the firm, management aptitude, corporate culture, along with other factors such as economic/market forces all conspire to make this a complex question to answer. The primary reason for the complexities regarding such question lye in the fact that deferent people in the same situations would react in different ways. "The debit to equity can also be referred to also as gearing or leverage"1. Debit to equity (also debit/worth) measures the risk of the firm's capital structure (also called financial structure) in terms of amounts of capital contributed by creditors and that contributed by owners (includes stockholders). It expresses the guard provided by owners for the creditors. In addition, low Debt/Equity ratio implies ability to borrow. While using...

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