What does restructuring typically involve in a corporate finance context?

Restructuring in a corporate finance context primarily involves reorganizing financial and operational structures. This process is often undertaken by companies facing financial distress, changes in market conditions, or the need for optimization to enhance efficiency and profitability. It can include activities such as renegotiating debt, divesting non-core assets, streamlining operations, and improving overall governance.

Through restructuring, companies aim to create a more sustainable operational model and address any imbalances in their financial positioning. This can lead to improved cash flow, better resource allocation, and a stronger competitive position in the marketplace, which are crucial aspects of effective corporate finance management.

The other choices do not encapsulate the essence of restructuring. Increasing the number of employees may be part of a growth strategy but does not generally align with restructuring efforts focused on reorganization. Acquiring new business lines can represent growth or diversification rather than the necessary realignment typical of restructuring. Reducing product prices is a tactical decision related to marketing and sales, not a fundamental reorganization of financial and operational structures.