{"id":16059,"date":"2013-05-03T13:44:40","date_gmt":"2013-05-03T08:14:40","guid":{"rendered":"http:\/\/vskills.in\/certification\/tutorial\/?p=16059"},"modified":"2024-04-12T14:14:46","modified_gmt":"2024-04-12T08:44:46","slug":"financial-decisions-2","status":"publish","type":"page","link":"https:\/\/www.vskills.in\/certification\/tutorial\/financial-decisions-2\/","title":{"rendered":"Financial Decisions"},"content":{"rendered":"

Financial Decisions<\/strong><\/h3>\n

The financing decisions are decisions concerned regarding the method that are used to\u00a0raise funds<\/strong>\u00a0which would be used for making\u00a0acquisitions.<\/strong>\u00a0The financing decisions are decisions concerning the\u00a0liabilities and stockholders’ equity<\/strong>\u00a0side of the firm’s balance sheet, such as a decision to issue bonds.<\/p>\n

The financing decisions involve various factors. They are determining the proper amount of funds to employ in a firm,\u00a0selecting projects and capital expenditure analysis<\/strong>, raising funds on the most favorable terms possible and finally managing working capital such as inventory and accounts receivable. The goals of corporate finance can be achieved only when the\u00a0corporate investment<\/strong>\u00a0is financed appropriately. The financing mix will make an impact the valuation. The company should therefore identify an optimal mix of financing i.e. the one which results in maximum value.<\/p>\n

The sources of finance are usually comprised of a combination of\u00a0debt and equity financing<\/strong>. A project that is financed through debt results in a liability and obligation. When the projects are financed through equity is less risky with respect to\u00a0cash flow commitments.<\/strong>\u00a0The cost of equity is always higher than the cost of the debt. The equity financing may result in an increased hurdle rate which will\u00a0offset<\/strong>\u00a0any reduction in thecash flow risk<\/strong>. The management of the company must match the financing mix to the asset that is being financed.<\/p>\n

\"images\"<\/a><\/p>\n

1\u00a0Define the decision.<\/strong>\u00a0What are you trying to accomplish? State it clearly.<\/p>\n

2\u00a0What\u2019s the need or want behind the decision?<\/strong>\u00a0Why do you think you have to make this decision now?<\/p>\n

3\u00a0What\u2019s non-negotiable?<\/strong>\u00a0What things are you not willing to compromise on if you decide to take action on this decision? If you are buying a car and you have a large family, the vehicle has to accommodate at least seven passengers. Or, your commute to work is far and you need a car that gets good gas mileage.<\/p>\n

4\u00a0Identify alternatives.<\/strong>\u00a0Have you carefully considered all the options? Yes, your older car is increasingly in need of repairs. But if you can plan the repairs so you aren\u2019t stranded, it\u2019s still probably cheaper than buying another car. Is public transportation an option? Do you absolutely need a car?<\/p>\n

5\u00a0Assess the various alternatives.<\/strong>\u00a0Once you\u2019ve identified them, examine each one carefully. Don\u2019t rule anything out. Often bad decisions are made because you settle on a particular solution before considering your options.<\/p>\n

6\u00a0What\u2019s the cost and can you afford it?<\/strong>\u00a0Calculate what each alternative would cost. If it\u2019s buying a used or new car, consider everything, including gas mileage, insurance premiums and reliability\/repair records for the vehicle you\u2019re thinking about buying.<\/p>\n

7\u00a0Take a step back.\u00a0<\/strong>Give yourself time to think about the decision. Be patient! If it\u2019s the right decision today, it will be right tomorrow. If the car you wanted has been sold, there will always be another one.<\/p>\n

8\u00a0Make a decision.<\/strong>\u00a0If you can say with certainty that you have followed the first seven steps, then proceed with confidence knowing you did all you could. Don\u2019t look back with regret.<\/p>\n

If you apply a systematic way of looking at financial decisions, you can avoid a lot of the bad ones that come back to haunt you.<\/p>\n

\n

Apply for Equity Research Certification Now!!<\/h3>\n

http:\/\/www.vskills.in\/certification\/Certified-Equity-Research-Analyst<\/a><\/p>\n

Back to Tutorials<\/strong><\/a><\/h4>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Financial Decisions The financing decisions are decisions concerned regarding the method that are used to\u00a0raise funds\u00a0which would be used for making\u00a0acquisitions.\u00a0The financing decisions are decisions concerning the\u00a0liabilities and stockholders’ equity\u00a0side of the firm’s balance sheet, such as a decision to issue bonds. The financing decisions involve various factors. They are determining the proper amount of…<\/p>\n","protected":false},"author":1,"featured_media":0,"parent":0,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"footnotes":""},"categories":[3331],"tags":[4045],"class_list":["post-16059","page","type-page","status-publish","hentry","category-equity-research","tag-financial-decisions"],"acf":[],"yoast_head":"\nFinancial Decisions - Tutorial<\/title>\n<meta name=\"description\" content=\"Financial Decisions. Govt of India Certification for Equity Research professionals. 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