Capital allocation decisions inevitably involve trade-offs. Companies need to strike the right balance between investments that serve regular business needs, investments that drive growth, and investments that may or may not result in substantial returns. There are five ways in which the company can deploy its capital once maintenance requirements have been taken care of – reduce debt, internal growth projects/organic investment opportunities, share buybacks, dividends and acquisitions. Capital allocation is both difficult and very important to a CEO/CFO’s job and we at ASCG, understand it pretty well. Done well, capital allocation can be transformed from an arduous and inconsistent process that tends to perpetuate the status quo into a true source of competitive advantage.