Overview of Strategies for Managing Surplus Funds
The term, strategies for managing surplus funds, means the various methods that are employed in order to manage the surplus funds. The surplus funds can be defined as the difference of the total revenue earned by a company and the total cost of production incurred by a company.
The surplus funds are created when the companies have completed the various expenditures that are associated with a business. There are several ways in which surplus funds could be used.
Ways of Managing Surplus Funds
One of the many ways of using the surplus funds is to employ it for the purpose of expenditures. The companies can invest the money that is left over with them after paying all the dues and so on.
The investments help the companies to diversify their operations. Quite often it has been observed that the companies use the surplus funds in order to provide more dividends to their shareholders. This helps in attracting other investors and helps the companies to improve their overall impression in the business world.
Surplus Funds and Flexibility
The surplus funds could be used in order to look after the issues in a company’s budget. The surplus funds have often been used for the purpose of creating a better budget that helps them to benefit themselves and possibly other people who are related to them like the shareholders for example.
Surplus Funds and Debts
The companies have often paid off their debts like taxes, rents and outstanding payments with the surplus funds. Surplus funds could also be used for the purpose of paying off the debts at earlier dates.
Last Updated on : 27th June 2013