Financial Policy and Corporate Strategy Overview

A process to achieve financial goals by strategically managing resources, using financial tools, and defining clear objectives.

The money, assets, and income available for financial planning.

Methods, strategies, and instruments used to manage finances.

Specific financial aspirations and targets to strive for.

The overall plan for resource deployment to achieve an organization's objectives.

The plan for mobilizing and effectively utilizing financial resources to support the corporate strategy.

Specific, measurable financial targets to guide decision making.

The process of choosing actions that align with financial objectives and strategies.

A type of financing that takes into account environmental, social, and governance factors, shifting from traditional finance to sustainability financing.

CFOs are taking a leadership role in creating value for their organizations, focusing on long-term sustainability.

The act of investing money in assets (like buildings, equipment) to potentially generate future wealth.

Making financial choices that align with the overall company strategy and goals for maximizing shareholder wealth.

The primary goal of corporate financial management is to increase the value of the company's shares for its owners.

Carefully allocating limited financial resources to the best investment opportunities to sustain or increase investor returns.

A successful business needs a clear strategy, financial resources and controls, and a strong management team to execute plans.

Businesses should always look for new investments that generate funds and benefit investors.

Using financial ratios to evaluate a company's performance and financial health.

Examining the flow of cash in and out of a company to assess its liquidity and operational efficiency.

The overall planning and decision-making process to achieve a company's long-term goals.

How financial decisions support strategic goals and vice versa. Both rely on a solid financial foundation.

Where companies obtain funds, including ownership capital (equity) and borrowed capital (debt).

The mix of equity and debt that a company uses to finance its operations.

A measurement of the proportion of debt to equity in a company's capital structure.

Different types of investment proposals companies consider: Adding new products, increasing production of existing products, or improving efficiency.

The process of evaluating and selecting investment proposals that align with company goals and maximize returns.

The process of strategically distributing available resources to different investment proposals and activities.

Analyzing potential projects based on various factors like profitability, risk, and return on investment.

A strategy outlining how much of a company's profits should be paid out as dividends to shareholders and how much should be retained for reinvestment.

Consistency in dividend payments over time. This can contribute to a positive perception of the company and higher share prices.

Paying a fixed percentage of net earnings as dividends. Offers flexibility in managing funds and lowers perceived risk for investors.

A constant percentage dividend policy signals to investors that the company is less risky, which can attract more investors.

A healthy rate of expansion for a company, balancing sales increases with the company's financial capabilities and policies.

Making sure a company's financial plans (like funding, expenses) align with its desired growth rate to ensure long-term success.

A framework that guides a company's financial decisions, including how to get, use, and manage money.

The close relationship between a company's overall plans and its financial decisions, each influencing the other.

The knowledge and understanding investors have about a company's financial health and performance.

The process of setting long-term goals and strategies for a company's growth and development.

The complex relationship where financial policies can influence corporate strategies, and vice versa.

A company that operates with long-term viability, considering environmental, social, and economic factors.

The maximum rate of growth a company can achieve without needing external financing.

Inflation raises the cost of assets, requiring more financing, and potentially decreasing the sustainable growth rate.

Companies may need to raise additional equity or reduce their growth rate to maintain financial stability.

Companies can choose to return profits to shareholders, reduce debt, or invest in lower-earning assets.

Companies can grow through increased sales volume or inflation.

High debt levels can increase financial risk for a company, making it harder to sustain growth.

High debt levels can increase the financial risk and potentially lower a company's sustainable growth rate.