There are companies, such as the sale of food (basic food basket products), which is in constant growth, due to the constant increase in demand, due to the increase in population and world economic growth. However, in several countries where there is a serious economic crisis, most of the companies have a tendency to decrease.
All companies, regardless of the activity to which they are dedicated, suffer accelerated changes in the price of their products, therefore, investments for the renewal of their inventory are increasingly greater, hence the need to resort to external sources of financing to allow them to continue operating.
Due to the aforementioned circumstances, managers make decisions in an environment of very high uncertainty, therefore, the chances of success are lower, which is reflected in all areas of companies, from production or services, to financial, in this regard Koontz and Weihrich (2004), notes that decision making "is the choice of a course of action against several alternatives", the important thing is to take the best one, which benefits the individual or the organization, with the least possible amount of consequences.
We can also highlight that a bad decision that entails a setback in the markets or poor financial management are some of the reasons why large companies have declared bankruptcy in recent years, therefore, managers must follow mechanisms to minimize the risks of uncertainty and thus ensure decisions that are positive for organizations.
In this sense, it should be noted that financial decisions should be made with the greatest possible caution, because they are decisive in obtaining financing, but may also imply a financial burden that the organization cannot cover..
Now, it is also necessary to make reference to the fact that in the Venezuelan case, companies are forced to resort to sources of financing due to the economic context, such as the high inflationary level, which has as a consequence that the prices of inputs, as well as raw materials, are constantly increasing, thus affecting the cost structure of the companies.
It is important to clarify that getting into debt can be detrimental, but not doing so can also be harmful, since liabilities are an important tool for the growth and development of any entity. However, liabilities are synonymous with debt and risk, so management must make the correct reading of debt ratios in order to make the best possible decisions.
Organizations need constant investments to guarantee an efficient productive and administrative process, and when establishing growth and expansion projects, decisions on investments to be made are decisive.
In conclusion, we can say that this situation is intensified in hyperinflationary economies, all this due to the constant increase of costs without any regularization, therefore, it is necessary to finance the acquisition of new inventories, for which the company must have the necessary payment capacity and these indexes help it to plan its indebtedness.
Reference:
Koontz, H. and Weihrich, H. (2004), Management, a Global Perspective. 7th edition. McGraw Hill, Edition. Mexico
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