Corporate finance is a financial concept that deals with the financial activities of a corporation. Under this strategy the managers of corporations take actions to increase the value of the firm to the shareholders. The main aim of corporate finance is to increase shareholders value. Corporate finance strategy enables the managers to balance capital funding. It maximizes shareholders value through long term and short term financial planning. Everything associated with capital investment to investment banking is the matter of discussion under corporate finance strategy.
Some objectives of corporate finance strategy are following:
- Capital Investment Decision is one of the crucial features of corporate finance strategy. It mainly deals with the accumulation of capital and its utilization towards investment. Here the investment is importantly concerned with capital budgeting and capital expenditures.
- Financing Decision is another important concern of corporate finance. This aspect deals with financial management which ensures the proper utilization of finance.
- Liquidity Decision is a very significant concern of corporate finance. It ensures the enough liquidity to carry out active operations of a corporation. It is also concerned with the current assets and liabilities of a corporation. Moreover, it ensures a corporation with sufficient amount of liquid assets.
- Corporate Value Maximization is a very important goal of corporate finance strategy. The maximization of corporate value is possible through proper short term and long term planning under corporate finance strategy.
Moreover, it is clear that corporate finance strategy is one of the important sectors of finance domain. It increases the value of a company as well as the value of sharegolders. Every small or big organization needs to apply this strategy to survive and for better financial growth development of a corporation.