Strategic & Tactical Financing Decision Flashcards
Strategic financial management means not only managing a
company’s finances but managing them with the intention
to succeed—that is, to attain the company’s long-term goals
and objectives and maximize shareholder value over time.
STRATEGIC FINANCING DECISIONS
means not only managing a
company’s finances but managing them with the intention
to succeed—that is, to attain the company’s long-term goals
and objectives and maximize shareholder value over time.
Strategic Financial Management
➢ Part of everyday life
➢ Capital Structure must be utilized in order to sustain needs
and wants.
Strategic Financing Decisions
must be utilized in order to sustain needs
and wants.
Capital Structure
is the particular combination of debt and equity
used by a company to finance its overall operations and growth.
Capital structure
FACTORS INFLUENFING CAPITAL STRUCTURE
Business Risk
Company Tax Exposure
Financial Flexibility
Market Condition
Cost of Fixed Assets
Size of Business Org.
Sector of Business Org
is any exposure
a company or organization
has to factor(s) that may
lower its profits or cause it to
go bankrupt.
Business risk
Business Risk Example
Ex. changes in consumer
taste and demand, the state
of the overall economy, and
government
rules
and
regulations.
A corporate tax, also called
corporation tax or company
tax, is a type of direct tax
levied on the income or
capital of corporations and
other similar legal entities
COMPANY TAX
EXPOSURE
the ability of a firm to access
and restructure its financing
at a low cost.
FINANCIAL FLEXIBILITY
Possibility of Losing Money due to different investment or business ventures
Financial Risk
Common Financial Risk are:
Credit Risk, Operational Risk, and Liquidity Risk
Leads to Insolvency
Financial Risk
COST OF FIXED ASSETS
Land
Vehicle
Hardware
License
Land
Furniture
Size of Business
Micro ( Up to 3M, 1-9 Employees)
Small (3,000,001-15,000,000, 10-99 Employees)
Medium ( 15,000,001 - 100,000,000, 100-199 Employees)
