This Is What Smart Capital Allocation Looks Like

Or how to distinguish between a visionary CFO and one merely pressing the buyback button

1. What Is Capital Allocation?

Capital allocation refers to how a company deploys its financial resources. After generating profits or raising funds, a company has several options:

• Reinvest in the Business: Enhancing R&D, expanding operations, or increasing marketing efforts.

• Acquire Other Companies: Pursuing mergers or acquisitions to foster growth.

• Pay Do…