Finance is the lifeblood of any business. Irrespective of the size and nature of the business, every business entity relies upon finance to survive and sustain in the competitive world. One of the primary goals of most businesses is to earn a profit, and without finance, this goal can’t be achieved. When it comes to a business entity, corporate finance is the division that deals with financial and investment decision. The aim of corporate finance is to leverage a company’s value by making the most prudent decisions about capital usage, investment, and dividends. Let's explore the world of corporate finance in detail.
The entire world of corporate fund revolves around its core principles:
The Investment Decision
Helps in the correct investment decision in assets to earn a greater profit.
The Financing Decision
Helps to analyze the best mix of debt and equity for business operations.
The Dividend Decision
If investment options can’t be figured out, it’s better to return the cash to business owners.
What is Capitalization Structure?
The term 'capitalization structure; includes the words capital and structure. In business terms, capitalization structure refers to the proportion of debt and equity that a company manages to carry out the overall business functions by using different sources. This turns out to be a big question for a financial manager as to how much to borrow? What’s the best mix for debt and equity? Capitalization structure is also known as a capital structure or cap structure.
What is Financial Modeling?
The world of finance is vast and includes a lot of financial structures and financial assets. Financial Modeling is a way of representing a real financial scenario in an abstract way to measure the performance of a financial asset.
What is Working Capital Management?
This appears the next question to a financial manager. Working capital management generally refers to short-term assets and is a must to meet the daily expenses that take place in an organization. It is essential to identify how much cash should be made available? Should we sell on credit basis? These questions turn out to get complex while managing working capital for a firm.
Sources of Corporate Finance
As mentioned above, a company manages the debt and equity through different sources. The multiple sources of corporate finance include Shares, Debentures, Public Deposits, Banks, Indigenous Banks, Retained Earnings, and Special Financial Institutions.
As we have seen, the main aim of corporate finance is to maximize the corporate value. A vital component of this is decreasing certain business risks, such as Default risk, Market Risk, Financial Risk, Interest Rate Risk, Credit Risk, Liquidity Risk, Operational Risk, and Settlement Risk.
Benefits of Availing Corporate Finance Services
Misuse of finance can lead to huge loss. Maintaining a proper check on the cash flow is extremely important. In order to maintain this, availing corporate finance service is a mandate. Now, let’s have a look at the benefits of corporate finance:
- Compares the hurdle rate for projects based on their complexities
- Helps to figure the best investment decision for business growth
- Build the financial strategies to maximize profit
- Maintain a balanced relationship between stockholders and management
- Helps in future decision making
JAXA Corporate Finance Services
Corporate services in Dubai have been growing to the great extent that increased the demand for financial consultants. Understanding the financial scenario of a business entity is a big challenge. At JAXA, we design the best financial structures for delivering a high cash flow framework system. We are a financial consultant in Dubai and we look forward to deliver the best to our clients worldwide. Some of the services we provide include:
- Arranging corporate loan for a company
- Preparing an information memorandum (or credit proposal), lender package and other documentation
- Advising on balance sheet structure
- Liaising with banks to negotiate on credit rates, facilities and terms & conditions
JAXA, since its inception, has been providing the best accounting and financial services in the Middle East zone and other areas as well. We have a wide range of satisfied clients at a global level. Our financial experts will take care to provide the best in determining the financial health of your company by using the appropriate techniques and methods to give the best return on investment for your company.
What are the types of risks that are included in corporate finance?
The risks in corporate finance include creditor default risk, country risk, foreign-exchange risk, interest-rate risk, and political risk.
What is time value of money?
Time value of money (TVM) is a concept that believes in the fact that the value of same amount of money to be received in the future is less as compared to its present value. It basically focuses on the belief that money invested today generates more money.
What is present value of money?
The present value of money is a concept that tells us what the present worth of a future sum is today, given a specified rate of return.
What is capital budgeting?
Capital budgeting is a financial planning process that helps to evaluate the potential expenses and investments that are large in nature.