Corporate Finance
Wednesday, February 6, 2008 | | |From management or corporate finance is the task of providing funds for a company of its activities. For small businesses, spoke as the financing of SMEs. It is generally balancing risk and profitability, while trying to maximize an entity of the richness and value of its stock.
In the long term funds are provided by the possession of equity and long-term credit, often in the form of bonds. The balance between these forms of corporate capital structure. Funding short-term or working capital is mainly provided by banks to extend a credit line.
Another decision on funding is the investment or management of funds. An investment is an acquisition of a property in the hope that it will maintain or increase its value. In managing the investments - in choosing a portfolio - one must decide what, how and when to invest. To do this, a company must:
* To identify the objectives and constraints: the institution or individual goals, time horizon, risk aversion and tax considerations;
* Identifying the appropriate strategy: active vs. passive -- Hedging strategy
* Measure the performance of portfolio
Financial management is duplicate the financial function of the accounting profession. However, financial accounting is more concerned about the statement of historical financial information, while the financing decision is directed towards the company's future.
In the long term funds are provided by the possession of equity and long-term credit, often in the form of bonds. The balance between these forms of corporate capital structure. Funding short-term or working capital is mainly provided by banks to extend a credit line.
Another decision on funding is the investment or management of funds. An investment is an acquisition of a property in the hope that it will maintain or increase its value. In managing the investments - in choosing a portfolio - one must decide what, how and when to invest. To do this, a company must:
* To identify the objectives and constraints: the institution or individual goals, time horizon, risk aversion and tax considerations;
* Identifying the appropriate strategy: active vs. passive -- Hedging strategy
* Measure the performance of portfolio
Financial management is duplicate the financial function of the accounting profession. However, financial accounting is more concerned about the statement of historical financial information, while the financing decision is directed towards the company's future.
