Balance Sheet Management is aimed at the determination of the optimal composition of different funding elements such as debt, mezzanine and equity for a company.
The right balance
It is a challenge to find the right balance in the contradicting objectives of short-term liquidity risk and lowering the long-term funding costs (eg WACC) of the company.
On the one hand, corporates are seeking sufficient financial buffers in order to mitigate liquidity risk, while on the other hand a more leveraged funding structure lowers the after tax funding costs and hence increases shareholder value. Next to these contradicting objectives, other prerequisites need to be taken into account, such as differing shareholder and stakeholder objectives, bank relationship management in order to determine the optimal composition of the balance sheet in a dynamic way.
We have developed a long-term financial planning model in which the optimal balance sheet composition can be simulated under different scenarios. Furthermore, we advise our clients in the strategic discussion on achieving shareholder objectives in relation to the funding structure of the company.
Interested in balance sheet management?
Get in touch with Laurens Tijdhof or Sander van Tol for more information about balance sheet management.
IFRS 16 compliance: incremental borrowing rate calculations driven by digital transformation
A significant change in lease accounting practices is a few months away: all lessors and lessees will have to be compliant with IFRS 16 standards from the start of their next fiscal year (1st of Janua...
To reflect the changing requirements of our clients, we have redefined our debt advisory service offering and established a dedicated team of consultants to secure the benefits of the currently strong...
With its expansion in Asia, Bucher Industries faced a tradeoff between local currency funding or central intercompany funding in Swiss francs for its foreign subsidiaries. This choice has an impact on...