Mastering capital allocation
Capital allocation aims to maximize shareholder value by deploying capital in ways that generate the greatest return. The purpose of capital allocation is to improve company performance by investing in growth opportunities and reducing or eliminating underperforming or non-essential businesses. Capital allocation decisions should be made with a long-term perspective, as opposed to being based on short-term financial results. Running a business takes work. There are a lot of factors that come into consideration, such as resources, finance, and management. There are a lot of examples of organizations that recorded great success but failed to manage their finances well, leading to their untimely demise. Prevention is always better than cure, so why not learn from those mistakes and ensure you don’t fall into those same traps? After all, a balanced capital…