Financial Slack

Extra money that a company has available in case of a downturn in sales, revenue, or profit. Financial slack may help a company make it through a difficult period. It is the equivalent of a company's savings.

References in periodicals archive ?

Financial slack may also influence transnationality, knowledge-based assets, and profitability (Bourgeois 1981).

Transnationality and financial performance in the era of the global factory

This indicates that financial slack influences the cash donations of enterprises.

How does the corporate philanthropy develop in China? Ideas, focuses and implications under the background of internet big data

If the information cost hypothesis is supported, on announcement date, a positive market reaction is expected for firms with higher growth orientation (MVBV), higher leverage (BKLVG), lower financial slack (CASH), and higher risk in terms of stock return volatility (STOCKSD).

Asset revaluations under international accounting standard 16: evidence from Korea

Financial slack, human slack, and R&D investments

Organizational slack effects on innovation: the moderating roles of CEO tenure and compensation

Like most work on slack, we use financial slack as an independent variable.

The impact of slack resources on high-tech IPOs

However, in the post-reform period, the level of absorbed and unabsorbed financial slack has fallen by a statistically significant 20%.

Local government amalgamation and financial sustainability: the case of England and Wales

In both scenarios, they found that corporate social responsibility was more sensitive to increased financial slack than other spending decisions, such as R&D and capital investment.

Rich biz gives more: corporate social responsibility

One example given is that financial slack could be used to buy the assets for the preemption of assets that a first mover can undertake.

An empirical investigation of the influence of organizational capacity and environmental dynamism on first moves

After NGOs ended their support for the centres, the government did not take up the full financial slack.

Lakes state health minister ready to pay striking health workers

In this case, in the presence of value creating investment projects--including acquisitions--it is important for the firms to have financial slack (or low debt level) in order to take advantage of these investment opportunities (O'Brien, 2003).

Acquisitions, joint ventures or arm's-length alliances? Analyzing the determinants of the choice of growth strategy in Brazil from 1996 through 2007

For instance, financial slack could help to buy plant and equipment to support the first move in creating a source of advantage based on preemption of assets.

The influence of organizational capacity and environmental dynamism on the first move-performance relationship

First, it picks up the financial slack for depositors when the banks fail.

A dagger at the heart of business: why business should be wary of the financial Services Oversight Council