Business Development

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The financial matrix strategy is a grouping of companies in four quadrants and gives strategy recommendation in order to adjust the company’s growth with investing and financing decisions, so that growth can produce returns that can cover financial cost.

In order to apply this financial matrix strategy, there are 15 public companies that have assets over one quintillion and 15 companies that have assets less than one quintillion which are going to examples based on the expert’s research.

Each company tends want to grow larger. One measure of the company’s growth is sales increase. The sales growth will have consequences on the increase of investment over the assets of the company and finally it requires funds to purchase the assets.

In other words, the company’s growth has consequences on the investment decision and financing decision. Therefore, it is the responsibility of the financial manager to balance between growths, return rate (return) on selected investment, and financial cost.

According to that, then it is necessary to discuss about growth adjustment, investment return, and financial cost with the matrix approach.

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Tags: Financial . This entry was posted on Friday, August 27th, 2010 at 2:40 pm and is filed under Financial Tips. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.