How can I improve my balance sheet structure?
April 26, 2023 | 40,00 EUR | answered by Xenia Zellerbach
Dear tax consultant,
I am Marcus Seiler and I run a medium-sized company in the IT industry. Over the past few years, I have noticed that my balance sheet structure is not optimal and I would like to take measures to improve it.
Currently, my balance sheet consists mainly of long-term debt that I have used for investments and growth. This has led to a relatively low equity ratio and I am increasingly concerned about the long-term sustainability of my financing. Additionally, I am burdened by the high interest costs associated with the long-term debt.
I am wondering how I can improve my balance sheet structure to make my company financially more stable. What measures can I take to increase my equity ratio and reduce my debt burden? Should I, for example, raise additional equity or restructure existing debts? Are there any tax aspects to consider that could help me optimize my balance sheet structure?
I would greatly appreciate your professional advice on this matter and kindly request specific recommendations on how to improve my balance sheet structure to lead my company to long-term success.
Thank you in advance.
Best regards,
Marcus Seiler
Dear Mr. Seiler,
Thank you for your inquiry regarding the optimization of your balance sheet structure. It is understandable that you are concerned about the financial stability of your company and wish to take measures to improve it.
There are various approaches you can consider to increase your equity ratio and reduce your debt burden. One possibility would be to bring in additional equity to strengthen the equity base of your company. This could be done, for example, by attracting new investors or by increasing capital. A higher equity ratio will make you less dependent on debt and therefore also reduce interest costs.
Another measure could be restructuring your existing debts. For example, you could consider replacing long-term debts with short-term ones to better manage maturities and reduce interest costs. Negotiating with your creditors for more favorable terms could also be an option.
In terms of tax aspects, there are also ways to optimize your balance sheet structure. For example, you could examine if certain tax benefits can be used to reduce your financing costs. The design of your financing structure can also have tax implications that you should consider.
It is important that you seek professional advice when implementing these measures to avoid tax pitfalls and achieve the best possible results. An experienced tax advisor can help you identify and implement the appropriate steps to optimize your balance sheet structure.
I hope this information is helpful to you and I am available for further questions. Thank you for your trust and I look forward to assisting you in improving your balance sheet structure.
Sincerely,
Xenia Zellerbach
