Review on Corporate Finance Presentation
Mary Maseko
The world economy relies on finance to exist; it provides funding where necessary which is usually repaid with a charge called interest. It can also be an expression used by specialists in the field when they look at how money is managed. Private corporations in addition to the public sector use the term when they discuss their business assets. Management of finance has also developed into a specialized branch within the financial sector and is carried out by finance managers.
These managers arrange funds to be lent to individuals or business using their company's assets where possible and if not sourcing the money elsewhere. The whole basis of optimization is to enable the maximum return from your finance whilst ensuring the cost to arrange it stays at a minimum.
Because the world revolves around finance, when there is a problem with bad debts and depressed markets, production and sales start to decrease as it is a very fine line that is walked. It is for this very reason that finance managers are very careful with finance they agree too and where it is funded from.
A well know marketing and management guru Lee Iacocca said that finance managers always looked at the cost involved in a finance deal and not the future return. The big difference between finance managers and sales managers is the direction they are facing; a sales manager is looking forward, towards the future. Many small business owners forget that the business loan they have arranged is not for personal use; a distinction which gets blurred regularly. When money is lent under these circumstances, lenders feel quite aggrieved as they have lost control of where the money is being invested.
By stopping business borrowing this way it is hoped they will start to see the importance of maintaining good practices which should help with investment later on. However, small businesses can finance their needs from other sources like friends or from banks and private lenders.
Finance managers can help improve their company's profits by using external sources which also lessens the risk on them at the same time. Bob Hope once said that you can only get a loan from a bank if you can prove to them you have absolutely no need for it; advice which could not be more true. But always make sure that you review all that you do with your finances, to try not to make the wrong decisions.
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