Growth potential – financial constraints
Journal Title: Acta Universitatis Nicolai Copernici, Ekonomia - Year 2011, Vol 42, Issue 1
Abstract
The Author analyses financial effects of various approaches used by management in crafting of business growth potential. Changes in investors’ expectations, forecasted growth in interest rates and financing costs give rise to questions about the significance of financial constraints in growth potential management. Some of the changes may have a short-term effect and will fade with subsiding of the crisis (limited access to financing, caused by investors’ risk aversion). Some effects however may be seen as long-term and cause changes in investment policies. Managers should recognize them and attempt to take them into account while crafting their strategies. Complexity and dynamics of changes in current business environment call for the use of simple, transparent methods that can be applied in practice. The author proposes the use of stable growth model and provides for examples of its use.
Authors and Affiliations
Przemysław Pomykalski
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