English translation: current debt/shareholders equity
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09:17 Feb 16, 2009
Spanish to English translations [PRO] Bus/Financial - Accounting / annual report
Spanish term or phrase:help with sentence
I am having trouble with the last part of this sentence: Uno de los grandes objetivos fijados por el Consejo de Administración es la reducción de la deuda tanto la relativa al circulante como la deuda estructural (activos fijos - r.r.p.p.). Especially with regards to la relativa al circulante and rrpp (PR seems unlikely in this context). Any suggestions? Thanks.
One of the great objectives set by the Administrative Council/Board is . . . .
Explanation: My translation:
One of the great objectives set by the Administrative Council/Board is the reduction of debt in regard to both current debt and long-term debt (fixed assets less stockholders' equity.)
On the right side of the accounting equation is the sum of liabilities or debt (current and long-term) and stockholders' equity, which added together is equal to the total assets on the left side. If one deducts stockholders' equity from total assets, one is left with total liabilities (deuda circulante + deuda estructural). Both of these debt items are being targeted for reduction by the Administrative Board.
Net working capital is translated as capital circulante neto, but here I understand that the author refers to current debt (deuda corriente). Current asset is activo circulante/realizable, and it seems the writer got tempted to attach circulante to short-term liability instead of using the usual term pasivo corriente. Instead of pasivo a largo plazo, deuda estructural is employed because in finance the capital structure includes not just equity but also long term debt.
I might have second-guessed the writer with regard to fixed assets (activos fijos).To financial analysts it does not make much sense if fixed assets are deducted by the equity, because they are normally funded also by long-term debt, but if the capitalization (LT debt + equity) exceeds fixed assets by a significant amount, the net working capital position is improved as well as the current ratio.
I hope I did not bore you with this technical discussion.