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
Defining the boundaries of financial sustainability of enterprises is one of the most important problems in a market economy. Inadequate financial stability may lead to a lack of funds to finance current or investment activities, while excessive financial stability will impede development, increasing the time of capital turnover and reducing profits. Justify the parameters of such sustainability allows financial analysis. It not only provides an opportunity to judge the situation of the enterprise at the moment, but also serves as the basis for developing strategic decisions that determine the prospects for the development of the company. 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