When it comes to financing for businesses, it's essential to seek healthy funding that allows for sustainable leverage, financial predictability, and incremental cash generation from the allocation of resources. Let's explore some important characteristics:
1.Choice of funding nature according to shareholders' purposes and company plans:
Borrowers and lenders should align on the use and purpose of resource allocation in the company. Thus, both have the same expectations regarding the expected cash generation capacity to repay the funding and generate incremental cash flow to the values taken.
Examples:
(i) Financing for machinery, equipment, expansion, technology in local or foreign currency;
(ii) Advance on Export, Import, or Working Capital Contracts, including in foreign currency;
(iii) Increase in capital by current shareholders;
(iv) Private Equity: institutional investors that purchase stakes in established companies;
(v) IPO: funding via stock issuance on stock exchanges;
(vi) Venture Capital: invest capital in exchange for equity participation and engage in management to grow the company;
(vii) Accelerators, incubators, and angel investors as funding modalities for startups.
2.Capital structure balance:
Determines how the company finances itself by balancing different sources of funds, payment terms, trade-offs between debt and equity, cost of debt, and return on invested capital, in addition to leverage indicators by operational cash generation, EBITDA, and equity to optimize the cost of capital and maximize operational cash generation to shareholders.
3.Adjustments for Efficient Working Capital Management:
Adjusting supplier payment terms and customer receivables to find the best balance between healthy purchasing, inventory, and sales conditions, and the consequent generation of working capital to ensure liquidity.
4.Profitability and Return on Investment (ROI):
Healthy companies seek investments that generate operational cash return. They assess project profitability and monitor the ROI of their investments.
5.Planning, Controlling, Transparency, and Corporate Governance:
Above is a simplified summary of Terus Consultoria's approach with clients and they manifest in a fruitful lever for sustainable growth.
"Terus, intelligence, advisory, concrete cases, and decisive actions!"
Contact Terus right away: contato@terusconsultoria.com.br / (+55 11) 2503-6747.
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