Describe more or less Financial Resources on business strategy?
Answers: Financial Resources: Financial resources concern the ability of the business to "finance" its chosen strategy. For example, a strategy that requires significant investment surrounded by new products, distribution channel, production capacity and working income will place great strain on the business finances. Such a strategy needs to be severely carefully manage from a finance point-of-view. An audit of financial resources would include assessment of the following factor:
Existing finance funds:
- Cash balance
- Bank overdraft
- Bank and other loans
- Shareholders' capital
- Working assets (e.g. stocks, debtors) already invested in the business
- Creditors (suppliers, government)
Ability to bring to the fore new funds:
- Strength and reputation of the direction team and the overall business
- Strength of relationships near existing investors and lenders
- Attractiveness of the market contained by which the business operates (i.e. is it a open market that is attracting investment mostly?)
- Listing on a quoted Stock Exchange? If not, is this a realistic possibility?