Finance consists of three interrelated areas:
- Money and capital markets, which deals with securities and financial institutions;
- Investments, which focuses on the decision made by both individual and institutional investors as they choose securities to their investment portfolios; and
- Financial management or “business finance” which involves decision within firms.
We operate on the assumption that management’s primary goal is to maximize the wealth of its stockholders. Financial decision affect the value of a firm’s stock by influencing both the size of the earnings stream, or profitability, and the riskiness of the firm. Policy decisions, which are made subject to government constraints, affect both profitability and risk; these two factors jointly determine the value of the firm.
Board of directors have the responsibility to decide the credit term under which customers may buy, how much investment the firm should carry, how much cash to keep on hand, whether to acquire other firms (merger analysis) and how much of the firm’s earning to plow back into the business versus pay out as dividends.
CGS Center provides independent, strategic advice on finance and value creation. We work with clients on topics such as valuation, transaction support, financial analysis and modeling, and strengthening the finance function.