A portfolio approach to managing a company's financial resource fit is based on:

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A portfolio approach to managing a company's financial resource fit is based on the fact that different businesses have different cash flow and investment characteristics. By balancing the cash flows and investment characteristics across different business units, a company can effectively manage its financial resources and reduce overall risk. Diversifying risk across a broad spectrum of businesses and acknowledging each business unit's varying degrees of opportunity are also important considerations, but they are not the main basis for a portfolio approach to financial management. The risk/reward concept of financial analysis and acknowledging that each business is financially strong are not directly related to a portfolio approach to financial management.

A Portfolio Approach to Managing a Company's Financial Resource Fit