Capital structure is the mix of debt and equity a company uses to raise funds. By analyzing a company's balance sheet, you can gain insight into its financial health.

When you're evaluating a potential company as an investment, the balance sheet matters ... you have $4 million in equity. In this case, the formula for equity-to-assets in this case would be ...

The ROE formula is net income divided by ... Next, move over to the balance sheet to calculate shareholders' equity, which is total assets minus total liabilities. Then all you need to do is ...