Capital Management

LOGO MARY ROSE VIRTUCIO

www.themegallery.com

CAPITAL MANAGEMENT
An accounting strategy that strives to maintain sufficient and equal levels of working capital, current assets, and current liabilities. This helps a company to meet its expense obligations while also maintaining sufficient cash flow and is primarily related to short term financial decisions.

Capital Resources Plan

Sources of Funds (Early Stage)

1 2 3 4 5 6 Own Money Family and Friends

Business Angels
Government

Venture Capital
Strategic Partners

McKinsey Outlines

Set aggressive goals

5 Outlines

Set Aggressive Goals

Most companies recommend safe timelines with built-in room for error and delay. This approach may be reasonable but it increases costs and creates expectations and tolerance for delays. In contrast Asian typically set high, even unrealistic, targets for project teams, making explicit trade-offs between time and cost.

McKinsey Outlines

Set aggressive goals Invest Broadly

5 Outlines

Invest Broadly
Many multinationals outsource nearly everything, which lowers their ability to control the project and assess how its coming along. Leaders in Asia regard project management as a core competence and retain an active role as its overall integrator and manager.

McKinsey Outlines

Set aggressive goals Invest Broadly

5 Outlines

Reconsider Low-cost Suppliers

Reconsider Low-Cost Suppliers

Western companies often limit purchases from low-cost suppliers to non-critical items, while Asian rivals source even critical components more cheaply by using vendors with excellent reputations in their home countries but a low international profile.

McKinsey Outlines

Set aggressive goals Invest Broadly

5 Outlines

Reconsider Low-cost Suppliers Avoid gold plating

Avoid Gold Plating

The best of the pack in Asia use their technical know-how to question assumptions and understand the reasons behind design decisions.

McKinsey Outlines

Set aggressive goals Invest Broadly

5 Outlines

Reconsider Low-cost Suppliers Avoid gold plating Flatten Organization

Flatten the Organization

The best companies McKinsey looked at believed that the intense, fast-paced nature of capital projects makes a flat organizational structure essential.

Managing Capital
Your ability to access liquidity, manage and release cash, control costs and engage with key stakeholders is essential

Preserving

The Essential Guide for Fast Growing Companies

Preserving
Keep Cash Flowing
Sound cash flow planning is critical to business survival. A robust short-term assessment of cash needs can help to predict impending risks. Work with your value chain partners to increase liquidity.

Debt Management
With difficult credit market conditions, a ground-up debt review is invaluable. Examine alternative sources of liquidity, such as short-term credit.

Cut Cost
Cost control is vital in a troubled economic environment. The challenge is to make quick cuts that are consistent with business strategy, without eroding value.

Managing Capital
Your ability to access liquidity, manage and release cash, control costs and engage with key stakeholders is essential Capital is precious.

Preserving

Optimizing

The Essential Guide for Fast Growing Companies

Optimizing
Cash First
The financial crisis is a reminder that profitability today does not guarantee sustainability tomorrow. Keep a close watch on cash flow.

Active Portfolio Management

Do not leave optimal capital deployment to chance. Benchmark your asset performance, both internally and against competitors.

Act Early
Faster acquisition integration starts with better pretransaction planning. Involve the managers who will deliver synergies in their identification, timing and valuation.

Managing Capital
Your ability to access liquidity, manage and release cash, control costs and engage with key stakeholders is essential Capital is precious.

Preserving

Optimizing

Raising

Use your capital wisely.

The Essential Guide for Fast Growing Companies

Raising
Be Prepared
To access capital at the lowest possible cost, you need to identify future capital needs as early as possible.

Look Beyond Debt and Equity

Create investment opportunities that satisfy the changing demands of capital providers.

Think Local
Regional financial markets are maturing rapidly. Consider sourcing capital in your target geographies.

Managing Capital
Your ability to access liquidity, manage and release cash, control costs and engage with key stakeholders is essential Capital is precious.

Preserving

Optimizing

Investing
Review your business through the lens of the investment and lending communities.

Raising
Use your capital wisely.

The Essential Guide for Fast Growing Companies

Investing
Be Agile
Successful investing requires rigorous due diligence and effective integration planning. But this takes time. To accelerate the process, hunt down opportunities dont wait for them to arise.

More Is Not Better

The increasing complexity of investment options demands better due diligence, but avoid simply doing more of the same.

Think About Structure

A joint venture or partnership could deliver your investment goals without the risks associated with an acquisition.

LOGO MARY ROSE VIRTUCIO

www.themegallery.com 2011