Then the sources of Finance is analysed using Modigliani-Miller Theorem and it reveals that the debt to equity position of the organization is good and has significant impact on its market value. However, the cash position of the company is not stable and requires attention from the management. The Dividend policy of the organization is healthy and looks at wealth maximization of the shareholders. The managers are concerned about the dividend return and regularly review the dividend policies. Moreover, the economic condition is quite unstable and a sluggish growth is expected. In this regards it is recommended that the organization should give attention towards their cash position and should enhance other activities through which their profitability can be enhanced. The organization is also suggested to maintain healthy debt equity ratio, having higher debt may negatively impact their firm value. Introduction The Unilever Group started their operations in 1885 but was not established until 1930 when the business actually joined forces to create the well established business prior to the start of 20th century. The corporate vision of the organization aims towards helping the people in order to look and feel good and get more out of their life. The organization aims to create a sustainable living place and a better future through their services and brands (Unilever, 2013a). The first priority for the organization is their consumers and then comes the employees, communities and the suppliers. The organization aims to fulfil their responsibilities by serving their customers and make their shareholders eventually rewarded. Financial strategy plays a major role in the sustainability of an organization. Financial strategy is a portfolio that includes corporate strategic plans that involves financing decision and optimum investment that helps in attaining the specified objectives. It is an area of managerial policies that determines the financial and investment decisions, which in turn leads to the wealth maximization of the shareholders (Hill, 2009). This paper focuses on the financial strategy of the organization and provides recommendation on the basis of that. Corporate Life Cycle The Corporate life cycle can be segregated into four stages through which an organization passes. The four stages are introduction, growth, matured and decline. The introduction stage is the point where the organization first places its product and services in the market for the customers. In this stage it starts capturing the market share. The next stage is the growth stage in which the organization with the best quality product or service is at the top of the competition. The sales increases and the organization spend money in building the brand. The demands of the consumers are at the highest point. The third stage is maturity where the organization has maximised their profit and is operating at a stable place in the market. Here the organization decides whether to withdraw their product or services from the market or to bring some innovation in them such that they remain in the market. The main focus is on the sustainability of the business. The last stage is the decline stage. At this stage the organization has already introduced their new products or next generation product. The
Evaluate Unilever’s financial strategy Table of Contents Executive Summary 3 Introduction 4 Corporate Life Cycle 4 Sources of fund 6 Modigliani-Miller theorem 8 Dividend Policy 11 Dividend Policy of Unilever 12 Lintners’s Four Stylised Facts 13 Recommendations 14 Reference List 16 Executive Summary In today’s complex and competitive business environment financial strategy applied by the organizations play a major role…
For instance, the countries also negotiate to reduce trade barriers for mutual benefits. The global economy has recorded tremendous growth primarily because of WTO, NAFTA etc. Business enterprises and consumers benefit from this expansion since new opportunities are created and new products are launched respectively.
However, in order to achieve a balance between the risk and return profile of a firm, it is important that firm must develop and construct strategies which can allow it to generate the kind of value which can balance both the risk and return.( Arnold, 2007), Risk therefore can affect organizations in different manners and as such the overall development of the enterprise wide strategies, making of investment decisions, calculations of hurdle rates as well as the mergers and acquisitions decisions are almost all made based on the firm’s effort to balance its risk and return.
Accordingly, this infers a close connection with the benefits of shareholders and therefore, with capital markets. For a corporate strategy to be successful, it must take into consideration all the external and internal participants in the corporate. Sainsbury’s Capital Structuring From recovery to growth, Sainsbury has exceptionally well regardless of the economic turndowns under the leadership of Justin King.
With a control of more than 17% of the UK supermarket sector, Sainsbury's is the third largest supermarket in UK. Despite its early establishment by Mary Ann and James Sainsbury, the firm faced a stiff competition from Tesco and Asda in 1995 making it to occupy the third position.
Unilever has always been a staunch follower of all social responsibility laws.The social responsibility laws focus on many issues (Sluyterman 2005, 12).Further, one such issue is the payment of minimum salaries to its workers.Another such issue is the implementation of work conditions where environmental laws are taken into consideration.
tal needs in support of its operational objectives over time as well as identifies optimum sources and manners for obtaining that capital.’(Richard D Harroch and Gregory C Smith, page 702)1 Financing a new business is based basically on the type of capital and amount of
The cumulative performance of both the firms is showing a consistent decline in the revenue as well as profitability of both the firms. This has also resulted into the decline into dividend paid out by the firms in order to maintain and sustain
Thus, a risk-conscious enterprise already has strategic plans in hand to handle any sort of crises prior to its happening and furthermore, it would inculcate such strategies in its daily working environment which would minimize any foreseen risks so as to avoid
From recovery to growth, Sainsbury has exceptionally well regardless of the economic turndowns under the leadership of Justin King. Being the crown of United Kingdom grocer retail stores, there has been a lot of