Financial Strategies of a Company

2666 Words Jul 3rd, 2011 11 Pages
INTRODUCTION TO FINANCIAL STRATEGIES OF A COMPANY

It is important for a business to have a clear financial strategy. This is true for both new companies and those with a long history. The strategy constitutes your company 's guiding principles in all its financial decisions.

Different scenarios demand varying strategies for the business. Of course the strategy must be re-evaluated whenever the business undergoes changes in its financial circumstances.

Factors involved
When you plan your financial strategy, these are some of the factors you should consider:

* Future need for liquidity * Future cash flow * Relation between assets and liabilities * Your company 's risk profile * Time horizon * How your
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The reason for this special significance is found in the speed with which growth by merger can proceed. It should be clear from the analysis of earlier chapters that neither extensive acquisition of existing firms, nor entrepreneurs bent on achieving monopoly and dominance are necessary for the explanation of the emergence of large and dominant firms.

EXCHANGE RATE UTILISATION AND ADAPTION
It was observed during the recent emerging market crises that as soon as an inflexible exchange rate and other financial sector weaknesses became apparent in an economy, institutional investors and currency speculators were attracted toward it, making a currency crisis imminent (Das 1993). Exchange rates create a risk to a business like Unilever. A bad exchange rate creates the need for Unilever to increase the prices; a positive exchange rate gives a firm the chance to earn more income. Unilever always monitors the financial status of the country they operate in, it always checks for any changes in the exchange rate and other economic indicators. The company’s local strategy is based from the exchange rate. Since exchange rates are unpredictable, Unilever makes sure that it has contingency plans to ensure that any abrupt change in the exchange rates would not cost

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