Strategic financial management by Ruby Sharma

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  • 1. 1Ruby Sharma, CBS,Landran
  • 2.  Strategy: a carefully devised plan of action toachieve a goal, or the art of developing orcarrying out such a plan Strategy is a course of action – including ablueprint of resources needed to get a desiredresult. The combination ofskills, tactics, knowledge and experiences thatan entity (individual or corporate) uses toachieve a specified objective is what we callstrategy. A strategy can be short-term or long-term, depending on the time frame covered by aproject or concern.2Ruby Sharma, CBS,Landran
  • 3. According to Professor Michael Porter ofHarvard Business School, Fundamental to thesuccess of any company and to any effort todevelop strategy is having a proper goal forbusiness clearly in mind. Purpose: How will your organisation achieveits desired financial position? To achieve this, you must ask:• WHAT – future position do you aim to reach? • WHERE – are you now? • HOW - are you going to get there?3Ruby Sharma, CBS,Landran
  • 4.  Finance: the business or art of managing themonetary resources of an organisation. What future financial position should theorganisation reach? How does it intend to get there? How does the organisation intend to managethe competing demands of spend versusretain? Do the organisation’s trustee andmanagement understand the primarystatements?4Ruby Sharma, CBS,Landran
  • 5.  A good starting point of financial strategyshould be the identification and formulationof objectives. This starting point is obviousas strategy depends on objectives or targets.Corporate objective can be financial or nonfinancial. Recent research has shown thatnon financial corporate objectives are asimportant as their counterparts.5Ruby Sharma, CBS,Landran
  • 6.  Management: the organising and controlling of theaffairs of an organisation or a particular sector of anorganisation. Management in all business and organizationalactivities is the act of getting people together toaccomplish desired goals and objectives usingavailable resources efficiently and effectively.Management comprisesplanning, organizing, staffing, leading ordirecting, and controlling an organization (a group ofone or more people or entities) or effort for thepurpose of accomplishing a goal. Resourcingencompasses the deployment and manipulation ofhuman resources , financial resources, technologicalresources, and natural resources.6Ruby Sharma, CBS,Landran
  • 7.  the identification of the strategies capable ofmaximizing an organizations net presentvalue, the allocation of scarce capitalresources, and the implementation andmonitoring of a particular strategy. Strategic financial management can be definedas ‘’the identification of feasible strategiescapable of helping a business achieve itsobjective/ target, the allocation of scarcefinancial resources among competing businessopportunities and the implementation andmonitoring of chosen strategies’’. Please notethat this definition is based on the coreassumption of finance – maximization of wealth.7Ruby Sharma, CBS,Landran
  • 8.  Definition: “the application of financialtechniques to strategic decisions in order tohelp in achieving the decision-makersobjectives” A management approach that looks atfinancial techniques in order to come up witha strategic decision making plan. An approach to management that appliesfinancial techniques to strategic decisionmaking8Ruby Sharma, CBS,Landran