Chapter 14 The Financing Issue

Chapter 14 up to and including Chapter 22 is Part 3 ‘FINANCING and PROFIT MEASUREMENT’ from ‘Business Economics VI Groundbreaking’. About Money, Capital and Period Profit.

In Chapter 14 you become familiar with the balance sheet, with leasing and factoring and a lot of jargon from the world of financing. You learn what can and cannot be calculated around the necessary or desired expansion of the share capital.

Learning Content Chapter 14: In addition to many terms and concepts from the world of financing, the central point is the issue of new shares, for example the determination of the issue price and the calculation of the (theoretical) claim value.

Before considering yet another additional capital supply for yet another new capital requirement, it is advisable to take a critical look at the balance sheet. You can also start immediately with that. From top to bottom the entire row of assets. What is there present, and it is earning nothing or too little? The stripping of the left side of the balance returns immediate money, with which debts on the right-hand side of the balance sheet can be repaid. In this way we achieve yield improvement through the reduction of the balance sheet.

With the help of what is explained in this chapter, the problems regarding the issue of new shares can be tackled. Sooner or later that will be discussed. In case of growth of the company, growth of the balance sheet in total, growth of the loan capital, equity and as part of it the share capital, that must also grow. Never forget: Loan Capital is TEMPORARILY and INTEREST-BEARING! Interest must be paid, even in the event of loss, and repayment must be made. Compare this with the Equity Capital, how nice is that EC: the dividend will be passed if necessary and nothing needs to be repaid.

A company is in actual fact a money machine that in principle makes more money from money. A whirring machine can turn into a chopping-puffing thing, but the opposite can also be the case. Companies constantly struggle with the financing issue that can be permanently resolved by maintaining good relationships with the various financiers on an ongoing basis.

Do you want to know more? See Chapter 14 in ‘Business Economics VI Groundbreaking’.

This book harshly criticizes out-of-date Business Economics textbooks.

The Profit Formula® i.e. The Way to Easy Profit Measurement (EXACTLY, QUICKLY and EASILY) is 1 of 8 ‘Scientific Perfections’ completely explained in ‘Business Economics VI Groundbreaking’. Schools / Universities ignoring this book, they train students totally wrong in Business Economics.

A self-study book, hardly needing a teacher. Necessary also for many managers in companies to improve their own performance.

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