How can I increase my equity in the balance sheet?
February 13, 2022 | 40,00 EUR | answered by Xenia Zellerbach
Dear Mr. Tax Advisor,
I am Ingo Germer, owner of a medium-sized company that has been active in the market for several years. In recent years, our company has developed well and we have seen increases in revenue and profits. However, I have noticed that our equity in the balance sheet has significantly decreased compared to previous years.
This development worries me, as sufficient equity is of great importance for the financial stability and long-term development of my company. Therefore, I would like to take measures to increase the equity in the balance sheet and improve the financial situation of my company.
What options are available to strengthen the equity in the balance sheet? Are there tax measures or other financial instruments that we can use to increase equity? How can I ensure that the equity remains at a stable level in the long term?
I look forward to your professional advice and support on this matter and thank you in advance for your help.
Best regards,
Ingo Germer
Dear Mr. Germer,
Thank you for your inquiry regarding the equity in your balance sheet. It is very positive to hear that your company has been experiencing good development in recent years. However, the fact that equity has decreased is an important indication that you should take measures to ensure the financial stability of your company.
There are various ways to strengthen equity in the balance sheet. One option is to inject additional equity from the shareholders. This can be done through contributions or capital increases. This will increase the equity and strengthen the financial foundation of your company.
Furthermore, you can try to increase equity by retaining profits rather than distributing them. By keeping profits and not paying them out, equity in the balance sheet is increased. This can help improve the financial situation of your company in the long term.
Tax measures can also help strengthen equity. For example, tax depreciation can be used to improve the equity base. Optimizing tax loss carryforwards can also contribute to increasing equity.
To ensure that equity remains at a stable level in the long term, it is important to pursue a sustainable financial policy. This means that you should structure your business activities in a way that generates sufficient profits in the long term to maintain and expand equity. Careful financial planning and control, as well as regular balance sheet analysis, are essential in this regard.
I am available for a detailed consultation and support to work together with you on suitable measures to strengthen the equity in your balance sheet. Please do not hesitate to contact me for further information or a personal consultation.
Best regards,
Xenia Zellerbach
Tax advisor
