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Financial strategies are key concepts applied by the senior corporate and finance managers to ensure the organizations they lead enjoy robust financial stability, high profitability levels, stable liquidity, and long-term economic strength. The strategies are achieved through SWOT analysis in order to comprehend both internal and external factors, which in turn influence the economic positions of the respective firms. This paper discusses the global financial strategies.
Financial strategies acceptable to most financial managers globally include; development of clear financial analysis strategies, financial risk management systems, corporate expansion both at local, regional, or international levels and the strategies guiding security market trading.
Financial Analysis strategy: This strategy concerns and ensures the adoption of the GAAP financial accounting and reporting systems by the firm. As part of this strategy, organizations are expected to prepare accurate and complete financial statements that are in tandem with industry practices and adhere to the local rules. Finally, the strategy regularly analyzes the company’s financial position as revealed by the profitability ratios such as profit margin and return on equity.
Financial risks management strategy: It is noted that financial risks are part of business operations that organizations face in their daily commercial activities. However, reviewing a variety of financial risks that organizations may be exposed to in the international markets is vital with the view of minimizing their effects to the firms. Such financial risks may include currency and credit risks, as well as political and market losses.
Corporate finance strategy: This strategy majorly concerns the capital structure, which involve the debt to equity ratio used to fund the company’s activities and financial markets systems that help firms in raising cash through bonds, stocks are preferred shares. This requires regular review of the company’s liquidity needs in order to meet all the financial commitments. The set strategies and models must be followed to ensure that the company achieved their global goals.
Corporate Expansion: Growth of companies is seen through asset, equity, and economic development strategies adopted. The approach is used to enter fresh local and international markets. Most global companies use merger or acquisition strategies, or engage in a joint-venture agreement to enter markets or to increase their market share.
This paper underscored the global financial strategies universally used by global companies. They include financial analysis, financial risks, corporate finance and financial markets, and corporate expansion strategies.