Corporate Finance

Financial Strategy, Structure, and Management

The primary goal of financial management is to maximize the wealth of the firm. Decisions you make about the financial strategy, structure, and management of the firm have a significant impact on your ability to achieve this goal. Choosing the proper amount and source of debt is a critical success factor for any firm. Matching the firm's financial risk profile with its business risk profile assures that the company will be able to meets its obligations, in good times and bad. Understanding the firm's total cost of capital is a prerequisite to evaluating true profitability. And making prudent capital investments will assure that the company is around for the long haul. Corporate Strategy & Finance Associates can help you maximize the wealth of your firm and increase the value of your business.

The Cost of Capital

Is your business profitable? Accounting profits are defined as the difference between revenues and expenses. But many companies earn accounting profits without being profitable. True economic profits are earned only when a company produces a return that exceeds its cost of capital. The cost of capital is determined not only by the interest a business pays on its debt, but by the cost of the equity invested by the owners of the business. Understanding your cost of capital is a critical first step in making sound business investments and in evaluating the true profitability of your business. Corporate Strategy & Finance Associates can help you identify your firm's cost of capital and allow you to make more informed, more profitable decisions.

Evaluating Capital Expenditures

Deciding whether and how much to spend on a new piece of equipment, a new building, or any other capital expenditure is one of the most critical decisions a manager can make. Investing in projects that increase the value of the firm is of course the goal, but just how do you know which projects are winners and which are losers. Corporate Strategy & Finance Associates can help you evaluate the financial impact that a potential investment will have on your company and allow you to make more informed decisions about the direction of your firm.

Financial Risk Management

Companies are exposed to all sorts of risks associated with the operation of their businesses. Most companies buy insurance to protect them against loss from fire, theft, negligence, and other perils. But many companies fail to properly insulate themselves from the risks associated with the financial management of their firm. For instance, what happens to your business if interest rates go up (or down)? Corporate Strategy & Finance Associates can help you minimize the impact of financial perils through the use of proven financial risk management tools.