The best type of capital increase to improve the performance of companies;
A) From the point of view of profitable companies:
– Capital increase from cash deposit is the best type of capital increase for the company because:
It preserves the accumulated liquidity of the company.
It will be a strong support for difficult days or future plans and plans of the company.
It brings new liquidity (fresh money) to the company.
Improves the company’s cash flow.
The company can settle part of its possible debts with these new resources.
It reduces company costs.
It increases the net profit of the company.
b) From the point of view of loss-making companies:
– Capital increase from asset revaluation is the best type of capital increase for this type of companies because:
It causes exclusion from the inclusion of Article 141 of the Trade Law.
It increases the credit of the company with banks.
It encourages major shareholders to hold company shares.
It makes the shareholders happy for the company.
It brings better and more financial circulation in the stock market.
The above cases may not definitely improve the performance of loss-making companies, which depends on the management capabilities of such companies.
c) From the point of view of shareholders:
Long term in order of priority:
1- Capital increase from accumulated profit because:
It does not impose an additional financial cost on the shareholder.
from the loss of shareholder’s time caused by going to the bank and prevents
It does not follow the trouble of preemption games and their transactions in the stock market.
Usually, the news of capital increase increases the share price.
1- Capital increase from revaluation of assets because:
It does not impose additional financial cost to the shareholder.
It does not follow the trouble of preemption games and their transactions in the stock market.
2- Capital increase from cash deposit:
In the long run, it will make more profit for the shareholder.
The shareholder participates in the constructive activities of his company.
It will be a strong support for difficult days or future plans and plans of the company.
By injecting new resources from the shareholders, the company can settle part of its possible debts.
Mehdi Koh Soltani (financial services, accounting, financial and tax consultant):
Group of accountants, auditors, Tabriz
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