Managing Procgdfductivity of Corporate Capital - Samreen

7/27/2019 Managing Procgdfductivity of Corporate Capital - Samreen

1/19

Managing Productivity of

Corporate Capital


2/19

CORPORATE CAPITAL

The companys capital consists of:

Equity shares

Preference share

Loans

Bonds and Debentures


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contd

In the most ideal situation, where a business

has very little risk of defaulting on a debt

obligation, the amount of corporate capital

would be close to the amount of the firm's

shareholder's equity

In the event of financial difficulties, any

losses sustained would initially impact the

firm's corporate capital before it would

impact other senior stakeholders


4/19

CAPITAL PRODUCTIVITY

Capital productivity is measured as real

output per unit of capital services.

It is an extent to which capital assets is

used to provide goods and services.

An increase in capital productivity means

that

a unit of capital is producing more output

than in the previous year the same amount of output is being

produced for fewer capital inputs.


5/19

500 %


6/19

MANAGING GOOD PRODUCTIVITY

Often it is an organization's financial strategy

and its capital productivity framework.

Companies should assess whether their

current capital investments align with market

norms and predictions.

Failure to align will lead to diminished share

price and overall organizational value.


7/19

FOCUSING ON CAPITAL

Capital is the lifeblood of every fast-growth

business.

A strong grasp of Capital Agenda must inform

all of your important business decisions. A company while assessing its Capital Agenda

must ask itself the following questions:

Should you restructure your business?

Is now the time to sell some of its assets?

How can you seize the premium acquisition

opportunities?


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CAPITALAGENDA

PRESERVING

OPTIMIZING

RAISING

INVESTING


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INVESTING CAPITAL

Investors in your organization want to

know why: why this transaction, why at

this price and why now Complicating matters, differing

stakeholders increasingly bring differing

expectations of investments and returns.


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FOCUS

Acquisition and alliances

Planning and structuring transactions to

optimize stakeholder return

Asset valuations

Cost- and tax-efficient structures


11/19

PRESERVING CAPITAL

A fast-growth company needs to preservecapital.

It needs to continuously evaluate the balancesheet, strategy and markets and look forstrengths and weaknesses.

It should seek opportunities, identify risks andguard against value erosion.

Its ability to access liquidity, manage andrelease cash, control costs and engage withkey stakeholders is essential to preservingcapital.


12/19

FOCUS

Stress and distress e.g., liquidity issues and

turnaround plan

Customer and supplier analysis

Preserving tax assets and minimizing costs

Refinancing and restructuring debt, equity and other

obligations

Dealing with stakeholder relationships and pressure

Dispute resolution


13/19

OPTIMIZING CAPITAL

Companies need a tight grip on the

drivers of efficient capital allocation.

Greater operational efficiency can releaseexcess cash and working capital.

More companies are taking an active

approach to business asset management.

Such rigor can uncover poor capital

deployment, leading to better capital

preservation and allocation.


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FOCUS

Optimizing asset portfolio

Delivery of synergies and effective integration

Improving working capital and releasing cash

Optimizing capital structure

Optimizing tax and corporate structure


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RAISING CAPITAL

Companies need to keep their capital needs under

constant review.

A companys ability to raise capital quickly and

effectively is integral to its growth potential and

financial well-being.

Even if the balance sheet appears strong, external

shocks can delay the journey to market leadership.

Review business through the lens of the investment

and lending communities.

Reduce your cost of capital.


16/19

FOCUS

Fundraising (equity and debt): IPO readiness, right

issues, PE, private placement and capital markets

Optimizing funding structures

Asset divestment

Infrastructure projects

Cost- and tax-efficient structures


17/19

CAPITAL PLANNING

- A Living Process

It should evolve with the marketplace

Not just in the annual assessments

Should be monitored with Intentional

regularity


18/19

CONCLUSION


19/19

Thank You

Pranay Bajekal

Naushad Ahmed

Samreen Kazi

Shahbaz Khan

Tameer Hussain Syed

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Managing Procgdfductivity of Corporate Capital - Samreen