1 / 6

Chapter 10 D eclining businesses: a case for euthanasia?

Corporate Financial Strategy 4th edition Dr Ruth Bender. Chapter 10 D eclining businesses: a case for euthanasia? . Declining businesses: contents. Learning objectives Financial strategy for a declining company In a declining company… Declining company transformation strategies.

gur
Download Presentation

Chapter 10 D eclining businesses: a case for euthanasia?

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Corporate Financial Strategy4th edition Dr Ruth Bender Chapter 10Declining businesses: a case for euthanasia?

  2. Declining businesses: contents • Learning objectives • Financial strategy for a declining company • In a declining company… • Declining company transformation strategies

  3. Learning objectives • Explain how the life cycle model relates to a company in the decline stage of its life. • Evaluate a deep discount rights issue. • Calculate the theoretical financial impact on an over-geared company of raising new equity.

  4. Financial strategy for a declining company

  5. In a declining company… • Reduce the cost base to prevent losses • Run the business for cash • Only reinvest if there is a short payback period • Be prepared to close down the business once it stops generating cash

  6. Declining industry transformation strategies High A single company rationalizes the industry by taking over small competitors until it acquires a dominant market share, enabling much greater financial returns Rate of market growth Low/negative High Low Relative market share

More Related