When deciding on raising funds, the financial director should take into account what the bulk of the company’s fixed costs are connected with and what is the situation with interest payments. Otherwise, there is a risk of seriously undermining the financial stability and profitability of the business.
Financing structure issues are important for any manager with the right to make decisions on attracting loans or investments. They are one of the most difficult. Should I use borrowed capital or limit my own? If used, will a bank or private investor be a creditor? If this is a private investor, what conditions to offer him? Etc. Continue reading
Financial management requires the constant implementation of various calculations related to cash flows in different periods of time. The key role in these calculations is played by the time value of money. Its essence is that the value of money changes over time taking into account the rate of return in the financial market. The same amount of money in different periods of time has a different value; this cost is now always higher than in any future period.
Financial management requires constant implementation of various financial and economic calculations related to cash flows in different periods of time. The key role in these calculations is played by the time value of money. Continue reading
Business – activity, the result of which is effectiveness and efficiency.
Effectiveness – achieving goals in the external environment, obtaining market, financial, social results. It is expressed in revenue, income, satisfaction of needs, material benefit and moral benefit.
Efficiency – profit, capital growth, increase in net cash flow.
Efficiency is achieved in the external environment in the direction of factors: consumer – product – market (PTR), relying on the capabilities of the internal environment.
The capabilities of the internal environment are determined by three key factors (PRT): Continue reading