FINANCIAL STRATEGY AND CORPORATE PERFORMANCE: THE MEDIATING ROLE OF COMPETITIVE ADVANTAGE

Strategic financial management occupies a central position in the survival and growth of modern business enterprises. It extends beyond the routine bookkeeping and compliance functions traditionally associated with the finance department and places financial decision making at the heart of corporate strategy. This paper examines the principal tools and techniques that organisations employ to align financial resources with long term strategic objectives, including capital budgeting methods such as net present value and internal rate of return, capital structure optimisation, working capital management, ratio analysis, the balanced scorecard, economic value added, scenario planning, and risk management instruments such as hedging and value at risk. The paper also explores valuation techniques used in mergers and acquisitions and situates these tools within the broader decision-making architecture of the firm. Drawing on real corporate experiences, including Reliance Industries' financing of its telecommunications expansion, Amazon's reinvestment philosophy, Tata Motors' acquisition of Jaguar Land Rover, and the contrasting fortunes of Kodak and Netflix during technological disruption, the paper illustrates how the use or neglect of these techniques has shaped corporate outcomes over time. It further identifies the practical difficulties firms encounter while implementing strategic financial management, such as data quality limitations, behavioural biases among decision makers, and the tension between short term shareholder expectations and long-term value creation. The paper closes by examining emerging developments, particularly artificial intelligence in financial forecasting, and the growing integration of environmental, social and governance considerations into financial decision making. The analysis suggests that no single tool is sufficient in isolation and that effective strategic financial management rests on combining quantitative rigour with sound managerial judgment. Keywords: Strategic Financial Management; Capital Budgeting; Capital Structure; Balanced Scorecard; Economic Value Added; Risk Management; Corporate Decision-Making.