Corporate financial management: Difference between revisions
imported>Doug Williamson (Expand.) |
imported>Doug Williamson (Consolidate comments about ACT's Competency Framework.) |
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*Investment and | *Investment and | ||
*Intercompany funding | *Intercompany funding | ||
Each of these responsibilities is a core technical competency for treasurers, as identified by the ACT's Competency Framework. | |||
They are each discussed in more detail below. | |||
==Corporate finance== | ==Corporate finance== | ||
Corporate finance theory (risk/reward) is applied in practice to evaluate sources and uses of finance. This encompasses everything from capital structure (debt, equity and dividend policy), through major business transformations (e.g. mergers and acquisitions) to individual financing decisions (e.g. whether to buy a particular machine). | Corporate finance theory (risk/reward) is applied in practice to evaluate sources and uses of finance. This encompasses everything from capital structure (debt, equity and dividend policy), through major business transformations (e.g. mergers and acquisitions) to individual financing decisions (e.g. whether to buy a particular machine). | ||
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==Long-term funding== | ==Long-term funding== | ||
The success of the organisation is dependent on access to funds. Identification of the most appropriate sources of funding to achieve the organisation's medium / long term objectives and putting funding solutions (including documentation) in place will ensure that funding is available whenever required. | The success of the organisation is dependent on access to funds. Identification of the most appropriate sources of funding to achieve the organisation's medium / long term objectives and putting funding solutions (including documentation) in place will ensure that funding is available whenever required. | ||
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==Investment== | ==Investment== | ||
Treasury needs to be prepared to handle cash surpluses as well as borrowing requirements. A financial investment strategy (based on security, liquidity and yield) that is consistent both with the needs of the business and with its risk appetite, should be in place as well as methodology to monitor the creditworthiness of investment counterparties. | Treasury needs to be prepared to handle cash surpluses as well as borrowing requirements. A financial investment strategy (based on security, liquidity and yield) that is consistent both with the needs of the business and with its risk appetite, should be in place as well as methodology to monitor the creditworthiness of investment counterparties. | ||
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==Intercompany funding== | ==Intercompany funding== | ||
Intercompany funding of subsidiary operations is generally an efficient source of funds for an organisation. It may not be straight forward to implement or manage, as tax, legal and regulatory aspects must all be taken into account especially when setting up intercompany structures such as netting systems, In House Banks etc. | Intercompany funding of subsidiary operations is generally an efficient source of funds for an organisation. It may not be straight forward to implement or manage, as tax, legal and regulatory aspects must all be taken into account especially when setting up intercompany structures such as netting systems, In House Banks etc. | ||
Revision as of 23:51, 27 December 2015
Overview of corporate financial management
Corporate financial management responsibilities include:
- Corporate finance
- Long-term funding
- Investment and
- Intercompany funding
Each of these responsibilities is a core technical competency for treasurers, as identified by the ACT's Competency Framework.
They are each discussed in more detail below.
Corporate finance
Corporate finance theory (risk/reward) is applied in practice to evaluate sources and uses of finance. This encompasses everything from capital structure (debt, equity and dividend policy), through major business transformations (e.g. mergers and acquisitions) to individual financing decisions (e.g. whether to buy a particular machine).
Long-term funding
The success of the organisation is dependent on access to funds. Identification of the most appropriate sources of funding to achieve the organisation's medium / long term objectives and putting funding solutions (including documentation) in place will ensure that funding is available whenever required.
Investment
Treasury needs to be prepared to handle cash surpluses as well as borrowing requirements. A financial investment strategy (based on security, liquidity and yield) that is consistent both with the needs of the business and with its risk appetite, should be in place as well as methodology to monitor the creditworthiness of investment counterparties.
Intercompany funding
Intercompany funding of subsidiary operations is generally an efficient source of funds for an organisation. It may not be straight forward to implement or manage, as tax, legal and regulatory aspects must all be taken into account especially when setting up intercompany structures such as netting systems, In House Banks etc.
