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Financing Management of Companies

In: Governing Business Systems

Author

Listed:
  • Eleonora Kontuš

    (University of Rijeka)

Abstract

The aim of this paper is, firstly, to explore the short- and long-term sources of financing available to companies, and secondly, to determine the sources of short- and long-term financing to be employed on the basis of lowest cost criteria and taking into account the importance of scientifically-based financial management. A company should consider the cost of all available sources along with their impact on its profitability and solvency, and decide on the optimal amount of short- and long-term sources of financing and their optimal composition from the cost-effective point of view. In determining which sources of short- and long-term financing to employ, it is important to take into consideration the cost of all sources available to companies and choose those most appropriate in terms of effective after-tax interest rate because this is what represents the real cost of financing. The result of the work will provide equations for calculating an effective interest rate for different short- and long-term financing sources available to companies.

Suggested Citation

  • Eleonora Kontuš, 2018. "Financing Management of Companies," Springer Proceedings in Business and Economics, in: Gandolfo Dominici & Manlio Del Giudice & Rosa Lombardi (ed.), Governing Business Systems, chapter 0, pages 1-23, Springer.
    • Handle: RePEc:spr:prbchp:978-3-319-66036-3_1
    DOI: 10.1007/978-3-319-66036-3_1
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