Financial Strategies of a Company
INTRODUCTION TO FINANCIAL STRATEGIES OF A COMPANY
It is important for a business to have a clear financial strategy. This is true for both new companies and those with a long history. The strategy constitutes your company 's guiding principles in all its financial decisions.
Different scenarios demand varying strategies for the business. Of course the strategy must be re-evaluated whenever the business undergoes changes in its financial circumstances.
Factors involved
When you plan your financial strategy, these are some of the factors you should consider:
* Future need for liquidity * Future cash flow * Relation between assets and liabilities * Your company 's risk profile * Time horizon * How your business will be financed
INTRODUCTION TO THE FINANCIAL STATUS AND CURRENT POSITION OF THE FMCG SECTOR
Post liberalization, because of the entry of a number of MNCs in India, the FMCG sales went up. But soon between 2000 and 2004, FMCG sector got hit, attributed to agricultural crisis and industrial slowdown. The crisis of declining FMCG markets was also driven by new avenues of expenditure for growing consumer income such as consumer durables, entertainment, mobiles, motorbikes etc. Indian population was all set to experience the new basket of products, but with cut-down on FMCG products. This lead to low share of FMCG spends in the consumer’s wallet.
But every year the disposable income was increasing, from $424 in 2002 to $599 in 2007. There was an inflection in 2005, when they could spend on value added/ premium products along with the new basket of products. This was the boom stage; all categories were growing at healthy double digit rates.
As the share of FMCG spend has come down over the last few years, high inflation will not have a major impact on the consumer. The incremental expenditure will not pinch. In the current slowdown and high inflation,consumers may not reduce the expenditure on FMCG products; rather
It is important for a business to have a clear financial strategy. This is true for both new companies and those with a long history. The strategy constitutes your company 's guiding principles in all its financial decisions.
Different scenarios demand varying strategies for the business. Of course the strategy must be re-evaluated whenever the business undergoes changes in its financial circumstances.
Factors involved
When you plan your financial strategy, these are some of the factors you should consider:
* Future need for liquidity * Future cash flow * Relation between assets and liabilities * Your company 's risk profile * Time horizon * How your business will be financed
INTRODUCTION TO THE FINANCIAL STATUS AND CURRENT POSITION OF THE FMCG SECTOR
Post liberalization, because of the entry of a number of MNCs in India, the FMCG sales went up. But soon between 2000 and 2004, FMCG sector got hit, attributed to agricultural crisis and industrial slowdown. The crisis of declining FMCG markets was also driven by new avenues of expenditure for growing consumer income such as consumer durables, entertainment, mobiles, motorbikes etc. Indian population was all set to experience the new basket of products, but with cut-down on FMCG products. This lead to low share of FMCG spends in the consumer’s wallet.
But every year the disposable income was increasing, from $424 in 2002 to $599 in 2007. There was an inflection in 2005, when they could spend on value added/ premium products along with the new basket of products. This was the boom stage; all categories were growing at healthy double digit rates.
As the share of FMCG spend has come down over the last few years, high inflation will not have a major impact on the consumer. The incremental expenditure will not pinch. In the current slowdown and high inflation,consumers may not reduce the expenditure on FMCG products; rather