Corporate finance is an area of finance that deals with the sources of funding, the capital structure of corporations, the actions that managers take to increase the value of the firms to shareholders, and the tools and analysis used to allocate financial resources. It is about managing day-to-day demands on business cash flows as well as with long-term financing goals (e.g., issuing bonds) and dealing with monitoring cash flows, accounting, preparing financial statements, and taxation.
With our experts in AMA, corporate finance & investment services are provided hassle free. We assist organizations by providing these services, through in-depth analysis of various entry options. Identifying and regularizing procedures and advising on bottlenecks on governance, regulatory, tax and compliance issues are few of the many services we provide in this area.
Trade finance represents the financial instruments and products that are used by companies to facilitate international trade and commerce. Trade finance services allows business owners to trade with local and international markets without any hardship. Trade finance service providers offer financial assistance to facilitate both international and local trading transactions with the help of various financial products. Trade financing promotes business growth by helping traders to secure necessary funds for purchasing goods and stock. Obtaining trade financing helps businesses to offer competitive terms to suppliers as well as customers.
AMA can help the trading companies to organize & file documents, pitch to the banks, and liaise and negotiate the best possible competitive terms with the banks. AMA’s experience of the UAE marketplace delivers a robust solution no matter how complex the deal is.
Fundraising- Debt & Equity
To raise capital for business needs, companies primarily have two types of financing as an option: equity financing and debt financing. Most companies use a combination of debt and equity financing. Principal among them is that equity financing carries no repayment obligation and provides extra working capital that can be used to grow a business. Debt financing on the other hand does not require giving up a portion of ownership.
AMA has experienced insights and market presence to provide holistic and hassle-free advice to match your strategic objectives. We offer hands-on assistance through the process of raising funds, from initial assessment and strategy to successful execution. By using consistent communications, we can help you develop and strengthen shareholder support for the deal.
Equity Funding is generally the issue of new shares in exchange of for a cash investment. Equity financing can be raised from angel investors, VCs and equity crowdfunding platforms. Before determining which equity, funding option should be considered, we help in identifying the right amount to be raised and the amount of equity required to give up based on the stage and valuation.
At AMA, we see your business as a whole, and treat you as one client to bring significant economies of scale and efficient and effective planning, execution and response. Our integrated approach allows us to help create deal value by building the critical link between strategy and execution. At the management company and fund level, our team can assist your key personnel’s critical activities.
Debt financing occurs when a firm raises money for working capital or capital expenditures by selling debt instruments to individuals and/or institutional investors. In return for lending the money, the individuals or institutions become creditors and receive a promise that the principal and interest on the debt will be repaid. Our highly-skilled team at AMA, provides support to companies and help them consistently in the funding process.
Investments & Capital Budgeting
Capital budgeting is vital in making decisions. Decisions on investment, which take time to mature, have to be based on the returns which that investment will make. As part of capital budgeting, a company might assess a prospective project’s lifetime cash inflows and outflows to determine whether the potential returns that would be generated meet a sufficient target benchmark. The capital budgeting process is also known as investment appraisal. Capital budgeting is a method of estimating the ﬁnancial viability of a capital investment over the life of the investment.
We at AMA, aim to provide support to clients through our highly-qualified advisory team by advising them on funding sources, capita structuring and investment decision.
Fairness & Solvency Option
A fairness option is a formally written analysis of the fairness, from a financial point of view, of a potential transaction. The option is based on the financial factors of a prospective transaction and provides an independent and objective analysis of the proposed transaction from the point of view of one or more interested parties.
A solvency option examines the ability of a company to meet its debt obligations as they come due, and is typically issued in connection with a highly leveraged transaction, a capital or debt restructuring, or a dividend recapitalization.
AMA has extensive experience providing fairness and solvency options to boards of directors, transaction committees, independent trustees, lenders and others with a fiduciary obligation to a particular set of existing or prospective stakeholders. Our opinions are independent and objective, built on thorough research and detailed analysis and we provide our clients with added assurance and confidence as they make crucial transaction-related decisions.
Capital financing is described as the methods businesses use to raise money, such as debt financing and equity financing. In debt financing, you borrow money to pay for business operations. With equity financing, you sell an ownership stake in the company. At AMA, we provide our clients with the proper guidance regarding capital financing and support them consistently through each and every step.
Return of capital, also known as Capital dividend, is a payment that a company makes to its investors, which is drawn from its paid-in-capital or shareholders’ equity. By contrast, regular dividends are paid from the company’s earnings.
A company will only pay a capital dividend, when its earnings are insufficient to cover a required dividend payment. This may possibly indicate that the company is in trouble as its business operations are not generating a significant amount of earnings or any earnings at all.
- A capital dividend is a type of dividend that is drawn from a company’s capital base, as opposed to its retained earnings.
- Regular dividends are paid from earnings, representing a share of the profits, and are a sign of good financial health.
- Capital dividends are often seen as a signal, when a company lacks spare cash to pay dividends, indicating possible financial trouble.
- Companies which pay dividends and that are struggling financially sometimes have the option of stopping dividends until their finances are back on track.
- Capital dividends are seen as a return of a portion of the money that investors had paid when they bought shares, hence they are not taxed.
Understanding a Capital Dividend
Payment of capital dividends is seen as a warning sign that a company is struggling to generate earnings and free cash flow. By paying out dividends from its retained earnings, the company may be exacerbating its troubles by shrinking its capital base and limiting its future investment and business opportunities. Dividends should be paid only when a company is on a strong financial footing.
Capital dividends are drawn from a company’s shareholders’ equity, which is a firm’s total assets minus its total liabilities. Shareholders’ equity represents a company’s net value. If all the company’s assets were liquidated and all its debts were repaid, shareholders’ equity would be the amount that would be returned to shareholders.
Capital Dividend vs. Regular Dividend
Traditional Dividends are considered a share of a company’s profits but they may be issued as cash payments, additional shares of stock, or another form of property.
A company’s board of directors decides on the type and amount of the pay out, and the timing of it, generally monthly or quarterly. The board may also distribute special dividends separately or together with a regularly scheduled dividend.
Dividends are a form of profit-sharing and a reward for a shareholder purchasing a stake in the company. Usually, a dividend payment indicates that a company is well established and is generating consistent Free cash flow.
Start-up companies and high-growth companies rarely offer such dividends, as they prefer instead to put any profits back into research and development to continue that growth. In fact, technology sector start-ups, often report losses in their early years and are not able to pay out dividends.
In contrast, well established companies that enjoy consistent and predictable profits, often pay the best dividends, such as 3M (MMM) and Coca-Cola (KO). These dividends are an incentive for investors to buy and hold their shares, since their stocks are rarely big gainers (or big losers) in the markets.
Investors that choose stocks that pay dividends are typically pursuing a dividend investing strategy as opposed to a growth strategy. Historically, these dividend payers are found in sectors including utilities, basic materials, oil and gas, financials, healthcare, and pharmaceuticals. Many blue-chip companies pay dividends and witness little stock appreciation.
- Share loans
A share loan is a personal loan that is secured using the balance in your savings as collateral. This type of loan generally has lower interest rates than other personal loans because it is secured. Share-secured loans are a good option for those with poor or no credit scores.