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Article: Capital management key to linking strategy and value growth.
- Article from:
- Financial Executive
- Article date:
- September 1, 2003
- Author:
CopyrightCOPYRIGHT 2003 Financial Executives Institute. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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Profitable growth is the key to unlocking long-term value creation, and no management process exerts more influence on the profitability of growth than capital management. However, the key role played by capital management in value growth is seldom reflected in the attention paid to it. At most companies, capital is allocated during the annual budgeting process, and focuses on requests to fund projects rather than strategies. The result can be an investment strategy that is not connected to business strategy and that will not deliver superior performance.
Yet, some management teams have achieved exceptional growth in the value of their companies by replacing this ...