Financial Slack

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.
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In this study, we explored the value of financial slack in the context of economic recession which, as detailed earlier, has been anecdotally offered in several preceding studies but not empirically tested.
Still, couldn't the county cut the Knoop folks some financial slack? "This event is something that promotes community spirit," says Knoop resident Jesse McManus.
Having cash and marketable securities (financial slack) reduces the need to borrow.
O'Brien (2003) found that firms competing on the basis of innovation make financial slack a strategic priority.
Now, Equation (2) informs how much of the investment need has been financed through financial slack (internal capital) and how much through capital provided by the external market.
David Cameron took the reins on his own in 2015 when the Tory-Lib Dems divorce was finalised and it meant he could introduce the policy that would make the BBC and not the Treasury take up the financial slack over the free licences.
Financial slack may also influence transnationality, knowledge-based assets, and profitability (Bourgeois 1981).
For example, due to higher external financing costs, leveraged firms (with little or no financial slack) could be susceptible to the underinvestment problem.
Like most work on slack, we use financial slack as an independent variable.
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