Several finance/accounting concepts central to strategy implementation are acquiring needed capital, developing projected financial statements, preparing financial budgets, and evaluating the worth of a business. Some examples of decisions that may require finance and accounting policies are:
- To raise capital with short-term debt, long-term debt, preferred stock, or common stock
- To lease or buy fixed assets
- To determine an appropriate dividend payout ratio
- To use last-in, first-out (LIFO), first-in, first-out (FIFO), or a market-value accounting approach
- To extend the time of accounts receivable
- To establish a certain percentage discount on accounts within a specified period of time
- To determine the amount of cash that should be kept on hand
Five especially important finance/accounting activities central to strategy implementation are listed below and then discussed:
- Acquire needed capital to implement strategies; perform EPS/EBIT analysis
- Develop projected financial statements to show expected impact of strategies implemented
- Determine the firm’s value (corporate valuation) in the event an offer is received
- Decide whether to go public with an Initial Public Offering (IPO)
- Decide whether to keep cash offshore that was earned offshore
Source: David Fred, David Forest (2016), Strategic Management: A Competitive Advantage Approach, Concepts and Cases, Pearson (16th Edition).
17 May 2021
18 May 2021
17 May 2021
18 May 2021
17 May 2021
17 May 2021