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Asset stripping refers to selling off a company's assets to improve returns for equity investors, often a financial investor, a "corporate raider", who takes over another company and then auctions off the acquired company's assets. [1] The term is generally used in a pejorative sense as such activity is not considered helpful to the company.
For example: the most appropriate level and mix of assets a company should hold. Financing decisions - concerns the optimal levels of each financing source - E.g. Debt - Equity ratio. Liquidity decisions - Involves the current assets and liabilities of the company - one function is to maintain cash reserves.
Asset recovery, also known as investment or resource recovery, is the process of maximizing the value of unused or end-of-life assets through effective reuse or divestment. While sometimes referred to in the context of a company undergoing liquidation , Asset recovery also can describe the process of liquidating excess inventory , refurbished ...
The assets of the company being acquired are often used as collateral for the loans, along with the assets of the acquiring company. The use of debt, which normally has a lower cost of capital than equity, serves to reduce the overall cost of financing the acquisition. This is done at the risk of magnified cash flow losses should the ...
For commercial banks and other types of financial services companies, some asset classes are required to be recorded at fair value, such as derivatives and marketable equity securities. For other types of assets, such as loan receivables and debt securities, it depends on whether the assets are held for trading (active buying and selling) or ...
Its scope, though, includes the allocation and management of assets, equity, interest rate and credit risk management including risk overlays, and the calibration of company-wide tools within these risk frameworks for optimisation and management in the local regulatory and capital environment. Often an ALM approach passively matches assets ...
How do you identify assets, liabilities and equity? Assets represent the resources your business owns and that help generate revenue. Liabilities are considered the debt or financial obligations ...
DIP financing may be used to keep a business operating until it can be sold as a going concern, [4] if this is likely to provide a greater return to creditors than the firm's closure and a liquidation of assets. It may also give a troubled company a new start, albeit under strict conditions. In this case, "debtor in possession" financing refers ...