What does the term "capital structure" refer to?

The term "capital structure" refers specifically to the mix of debt and equity financing that a company uses to fund its operations and growth. Understanding capital structure is crucial for managing a business's finances, as it influences the overall risk profile, cost of capital, and financial flexibility of the organization. A balanced capital structure can optimize returns while minimizing the cost of financing and maintaining control over the business.

In contrast, the other options focus on unrelated aspects of a business. For instance, the number of employees addresses workforce size, which does not directly relate to how a company finances its activities. The marketing budget pertains to how much a company spends on promotional activities and also has no relevance to capital structure. Similarly, customer satisfaction ratings measure how well a company meets customer expectations, which is more aligned with business performance rather than financial structuring.