The Definitive Guide to Business Finance: What smart managers do with the numbers, Second Edition
by Richard Stutely
The financing imperative
Every business needs financing, even when at first glance it might appear that funding is unnecessary. For example, if you are retailing goods and do not pay the supplier until after you have collected from your clients, you are using trade finance. If you have a cash surplus which you use to buy the gizmos, you are financing your operations from retained earnings. And so on.
It is important that financing is efficient, which usually means low cost. The choices are not always as obvious as they might appear. Moreover, there are two angles to this topic. First, there is the matter of raising finance through equity and loans, and finding the optimal balance. Then there is the investor’s viewpoint to consider. An investor’s ...
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