What are those components active in Financial Resources of a business Strategy?
Financial Resources
Financial resources concern the ability of the business to "finance" its chosen strategy. For example, a strategy that requires significant investment in new products, distribution channels, production capacity and working capital will place great strain on the business finances. Such a strategy needs to be very carefully managed from a finance point-of-view. An audit of financial resources would include assessment of the following factors:
1. Existing finance funds
- Cash balances
– Bank overdraft
– Bank and other loans
– Shareholders’ capital
– Working capital (e.g. stocks, debtors) already invested in the business
– Creditors (suppliers, government)
2. Ability to raise new funds
- Strength and reputation of the management team and the overall business
– Strength of relationships with existing investors and lenders
– Attractiveness of the market in which the business operates (i.e. is it a market that is attracting investment generally?)
– Listing on a quoted Stock Exchange? If not, is this a realistic possibility?
November 23rd, 2009 at 9:53 am
Financial Resources
Financial resources concern the ability of the business to "finance" its chosen strategy. For example, a strategy that requires significant investment in new products, distribution channels, production capacity and working capital will place great strain on the business finances. Such a strategy needs to be very carefully managed from a finance point-of-view. An audit of financial resources would include assessment of the following factors:
1. Existing finance funds
- Cash balances
– Bank overdraft
– Bank and other loans
– Shareholders’ capital
– Working capital (e.g. stocks, debtors) already invested in the business
– Creditors (suppliers, government)
2. Ability to raise new funds
- Strength and reputation of the management team and the overall business
– Strength of relationships with existing investors and lenders
– Attractiveness of the market in which the business operates (i.e. is it a market that is attracting investment generally?)
– Listing on a quoted Stock Exchange? If not, is this a realistic possibility?
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