Corporate Finance

The management of corporate funds concerns corporate finance. It has two primary duties, i.e., acquisition of the funds and their successful usage. In this regard, several other significant decisions are with respect to financing, the structure of capital, expenditure, working capital, performance evaluation, and financial valuations.

In every business organization, the management of corporate finance is practiced at their finance department. It deals with all finance-related matters and, to be precise, it deals with company financing and investment decisions.

Financing decisions are related to selecting and acquiring the right sources of finance in an acceptable combination for the company's activity. In contrast, investment decisions are decisions about utilizing the acquired funds most efficiently by evaluating the returns of the ventures and their alignment with organizational objectives.

Based on analysis of different means of funds such as their costs, dilution in control, risk, and restraint on managerial freedom, financing decisions are taken. Capital structure techniques play an essential role in determining the appropriate mix of these funds. Some of the significant capital structure approaches are the net operating income approach, net income approach, the traditional position, and Modigliani and Miller position.

Investing decisions, on the other hand, involve the analysis of projects and capital expenditures using capital budgeting techniques. The renowned capital budgeting techniques are benefit-cost ratio, net present value (NPV), internal rate of return (IRR), payback period, etc. These decisions are taken based on the investment proposal's viability in terms of its capital requirement, cash flows, profitability, etc. Also, these parameters are best judged using the capital budgeting techniques.

The periodic aspect of corporate finance management illuminates long term and short term financial management separately. Short-term financial management is the aspect where working capital management plays a significant role. Working capital management is all about managing day to day finance requirements of a business. In business terms, it deals with current assets and current liabilities. It also involves managing cash and liquidity, credit, inventory, and the working capital itself. Diverse ratios and techniques are used to decide about the right cash and inventory levels.

Another important facet of corporate finance is financial analysis and planning. Financial statements are reviewed to determine a company's financial performance. The analysis is done using the financial ratios, which are classified into five types, such as leverage ratios, profitability ratios, turnover ratios, valuation ratios, and liquidity ratios. Apart from ratios, break-even analysis is another valuable method that describes the difference in income due to output, costs, and prices.

Planning about the future is more important than historical analysis, and this is where financial planning comes into the picture. The finance manager prepares pro forma or estimated financial statements to figure out if the corporation is directed toward meeting its long-term objectives.

Financial valuation is currently a crucial problem to address in corporate finance, which was just of academic value previously. It includes the valuation of companies. In major transactions such as mergers and acquisitions, disinvestment, spin-off, etc., it has significant importance. To measure a company's value, methods such as book value, price to earnings ratio, discounting cash flows, etc., are used.

Corporate Finance Services

We understand the value of finance. Therefore, we provide our expertise and assistance to you in acquiring corporate finance as per your specific needs.

Take Advantage of Corporate Finance Services from Finnova Advisory

Finnova Advisory offers corporate finance assistance. We have formed alliances with numerous banks and financial institutions to provide a wide range of lender options. According to your eligibility and financial requirement, we recommend quick processing, competitive interest rates, and multiple collateral options to ensure that this is the best option for your business. We also deal with private, PSUs, co-operative banks, and NBFC’s.Along with this, our team of specialists takes pride in offering unbiased advice to our customers regarding our services. Acting as a mediator, we are readily available to help you apply for corporate finances service from some leading banks and financial institutions.