The area of finance that deals with providing of money for businesses and the sources that provides them is termed as corporate finance. These sources provide capital to the organizations for paying out structural improvements, expansion, and other value-added projects and enterprises. Capital is basically referred to as money. It is primarily concerned with maximizing shareholder value through long-term and short-term financial planning and the implementation of various strategies. It comprises of capital investment decisions and investment banking also. Short-term issues include the management of current assets and current liabilities, inventory control, investments and other short-term financial issues whereas long-term issues include new capital purchases and investments.
The purpose of corporate finance is to maximize shareholder’s value and thus providing the capital needed to implement capital investments.
Having too much debt may increase default risk, and relying heavily on equity can dilute earnings and value for early investors.
By not following financing strategy, an organisation will not be able to predict future risk and thus leading to downfall of its company.
How we help
We have helped our clients with following strategies –
- Capital budgeting
Through capital budgeting, a company identifies capital expenditures, estimates future cash flows from proposed capital projects, compares planned investments with potential proceeds, and decides which projects to include in its capital budget.
- Capital investment
The decision of making capital investments is mainly concerned with capital budgeting, which is an integral part of corporate finance procedure. Poor capital budgeting causes over/under-investing which could put a company in weaker financial condition, either because of increased financing costs or having an inadequate operating capacity.
- Capital financing
It is a balancing act in terms of deciding on the relative amounts or weights between debt and equity. Having too much debt may increase default risk, and relying heavily on equity can dilute earnings and value for early investors.
- Short term liquidity
Short-term financial management deals with current assets and current liabilities, or working capital and operating cash flows. A company should be able to meet all its currentliability obligations when due which leads to sufficient current assets that can be cash-ready, such as short-term investments, to avoid any liquidity or cash crunch from disrupting a company’s operations.