What are the sources of financing for the company's assets?
What resources are included in the company's assets?
How is the relationship between non-current and current assets philippine cellphone number code configured and how is this relationship translated into operational risk?
How is the structure of liabilities structured and what is the proportion of external capital in liabilities that translates into financial risk for the company?
The choice of a company's asset management strategy is often dictated by the individual risk appetite of the owner or management. Higher profits are often associated with taking on higher risks - not necessarily real risks, but only risks perceived by decision-makers and closely related to their knowledge of industry changes and the company's innovation potential. In practice, there are three basic asset financing strategies: dynamic, conservative and moderate.
A dynamic financial strategy, commonly called an aggressive strategy, consists of minimising net working capital. The value of this capital can be close to zero or even sometimes take a negative value. When this value is equal to zero, it can be deduced that only fixed assets are financed by fixed capital and current assets are
fully financed by short-term liabilities. On the other hand, with a negative net working capital, it must be deduced that a part of the fixed assets is also financed by short-term liabilities.
The greatest risk for a company is usually linked to the level of working capital employed
in the company. This risk increases as the level of net working capital decreases. When this capital becomes negative, the financial equilibrium of the company is disrupted. If the company wants to generate high profits, it must opt for a very risky strategy, often associated with significant liquidity fluctuations. An aggressive strategy with a negative net working capital requires the constant maintenance
and renewal of short-term liabilities. Another aspect of this issue is the need to quickly liquidate fixed assets when liquidity is threatened, which is not always easy
and profitable.