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Otilia Manta ()

Internal Auditing and Risk Management, 2019, vol. 54, issue 2, 25-35

Abstract: Whether we are discussing ways of financing at national or European level, doing business at the level of a company generates important financing needs related to the exploitation cycle, as well as development, restructuring or modernization activities. For their funding, internal and external resources can be used. As a rule, investment activity is the most important “consuming†of external resources. As the company has more possibilities to finance its business, it is a question of choosing the ones that best fit its needs. This selection is made taking into account certain conditions limiting the scope of resource procurement. Long-term resource needs can be met by appealing to the banking system, the capital market, specialized firms or the state. Since these resources are part of the permanent capital, being found in the company’s financial mechanism for a long period of time, a proper substantiation of the financing decision is required. In this respect, the ratio between leverage finance and equity must provide the lowest funding cost, with funding decisions based on optimizing the proportion of the funding source, allocation and use of funds, and obtaining future financial surpluses that will allow reimbursement lending and business development. Establishing a financial structure is an important decision that is included in the company’s financial policy. Thus, it is necessary to decide how to allocate funding between short-term debt and the use of permanent capital. Moreover, we are currently witnessing a great deal of challenges in how to finance a company, funding using digital technologies is one of the most current ways.

Keywords: financing; sustainability and business development (search for similar items in EconPapers)
JEL-codes: F17 G23 O3 (search for similar items in EconPapers)
Date: 2019
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