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They enable both the buyer and supplier to improve their workingcapital by making it possible for the former to extend its payables and at the same time accelerate payment to the latter. The use of FinTechs allows suppliers to access funding at the multinationals firm’s lower cost of capital.).
The goal of strategy is profitable growth, meaning economic value above the firm’s cost of capital. Smartly reducing assets devoted to activities that earn less than their cost of capital requires good links with evolving market realities. ( Isn’t that a function of risk parameters and the debt-to-equity ratio?
However, higher accruals can reflect either innocuous aspects of certain business models, such as in the construction industry, where the time lag between earning income and realizing cash is long, or that growing firms retain higher workingcapital to meet greater current and future customer demand.
Among the firms we identified as focused on the long term, average revenue and earnings growth were 47% and 36% higher, respectively, by 2014, and marketcapitalization grew faster as well. public marketcapitalization over this period. .” In this case its capital charge is $800 times 8%, or $64.
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