Ultimately, your financial structure is a policy decision, not an outcome. True, the numbers are an outcome—if total equity is $49,999,583.39, we have a precise outcome. But we might also say, “We want our equity to fund 50% of our assets, and we will make adjustments via dividends, stock issues, and stock repurchases to maintain this percentage.” That is a policy statement.

Performance measures are both policy decisions and outcomes. They shape and constrain the financial structure.