Opinion ID: 1298687
Heading Depth: 1
Heading Rank: 5

Heading: Budget and Financing

Text: We next turn to the area of budget and financing. Amoco Corporation maintained some control over the financing and budget policies of the subsidiaries. For example, Amoco Corporation created one consolidated control budget. The budget was based on a single forecast of corporate performance for the year and encompassed the three major operating subsidiaries. Amoco Corporation also maintained some control over the financing and debt of its subsidiaries. As a general policy, subsidiaries did not borrow money on their own and major items of long-term debt were issued in the name of Amoco Corporation, not in the name of the subsidiaries. When the subsidiaries borrowed money independently, Amoco Corporation usually guaranteed their debt. Amoco Corporation also financed the subsidiaries and funded subsidiaries that needed money from internal sources. Excess working capital from the subsidiary companies was regularly transferred to Amoco Corporation.