Archive | Firms

Financial Analysis of a Firm | Firms | Financial Management

After reading this article you will learn about external and internal financial analysis of a firm. External Analysis: Financial analysis performed by creditors of the firm, shareholders or investment analysis is called External Analysis. It makes use of existing financial statements and involves limited access to the confidential information of the firm. Internal Analysis: Financial […]

Diversification of Firms | Strategic Management

In this article we will discuss about the diversification of firms. When considering ‘synergy’, it is important to note that businesses can be similar with respect to some resources while being different in terms of others. The key to successful diversification is to group together those businesses which, despite their differences, have at least one […]

Sources to Gain Competitive Advantage of a Firm | Management

The evidence of researches so far made provides two major approaches to achieving competitive advantage:- 1. Market share approach, and 2. Synergy approach. Major sources of competitive advantage for each of these approaches are indicated in the diagrams next— Market Share Approach: Let us now briefly examine the sources and arguments concerning market share and […]

Strategies for Corporate Growth of a Firm | Management

The following points highlight the seven major growth strategies that are listed below which are relevant in the early stage of potential- development. 1. Hold relative position in high-growth products/markets: The growth associated with this strategy is directly attributable to the growth in demand for the product/service being produced by the firm. The funds necessary […]

Distribution Function and Strategy of a Firm | Strategic Management

In this article we will discuss about the distribution function and its strategy as a part of business planning and strategy. Distribution Function: The function of distribution in case of a large firm can be seen from three view points: (a) From a Value-Added Perspective: The distribution function provides ‘time and utility’. An inability to […]

Mathematical Analysis of Investment Project | Firm | Management

In this article we will discuss about the mathematical analysis of firm’s capital investment project.   The net present value of a project is equal to the sum of the present value of all the cash flows (inflows and outflows) associated with the project. NPV = Net present value, An = Cash flow occurring at the […]

Capital Structure of a Firm: Meaning, Essentials and Factors

After reading this article you will learn about:- 1. Meaning and Concept of Capital Structure 2. Balanced or Optimum Capital Structure 3. Essentials Characteristics 4. Objectives 5. Factors. Meaning and Concept of Capital Structure: For any business (investment) project, it is essential to estimate the amount of capital likely to be required for the business. […]

Calculating the Valuation of a Firm (With Formula)

Some of the commonly used methods for calculating the valuation of a firm are as follows: 1. Capitalised Earnings 2. Assets Approach 3. Market Value Approach 4. Earnings per Share. Valuation of Firms: Method # 1. Capitalised Earnings: The capitalised earnings method is based on the philosophy that the price which a buyer would like […]

Financial Restructuring of a Firm

After reading this article you will learn about the Financial Restructuring of a Firm:- 1. Meaning of for Financial Restructuring 2. Buyouts (BO) for Financial Restructuring 3. Leveraged Buy-Out (LBO) 4. Sell-Off 5. Debt-Equity Swaps 6. Mergers in India 7. Accounting for Amalgamations. Contents: Meaning of for Financial Restructuring Buyouts (BO) for Financial Restructuring Leveraged […]