Chapter 16

Chapter 16 - Chapter 16 Financial Management and Securities...

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Financial Management and Securities Markets Objectives a. Describe some common methods of managing current assets. b. Identify some sources of short-term financing (current liabilities). c. Summarize the importance of long-term assets and capital budgeting. d. Specify how companies finance their operations and manage fixed assets with long-term liabilities, particularly bonds. e. Discuss how corporations can use equity financing by issuing stock through an investment banker. f. Describe the various securities markets in the United States. g. Critique the short-term asset and liabilities position of a small manufacturer and recommend corrective action. Current Assets and Current Liabilities 0. Current assets are short-term resources 0. Cash 1. Investments 2. Accounts receivable 3. Inventory 1. Current liabilities are short-term debts 4. Accounts payable 5. Accrued salaries 6. Accrued taxes 7. Short-term bank loans Managing Current Assets 0. Managing cash 1. Investing idle cash 2. Maximizing accounts receivable 3. Optimizing inventory Managing Cash 4. 4. Effectively managing the firm’s cash flow is crucial 0. Transaction balances 1. Lockbox systems 2. Electronic funds transfer Investing Idle Cash 5. Marketable securities 6. US Treasury bills (T-bills) 7. Commercial certificates of deposit (CDs) 8. Commercial paper 9. 9.
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This note was uploaded on 04/21/2008 for the course BUSA 106 taught by Professor Staff during the Spring '08 term at Winona.

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Chapter 16 - Chapter 16 Financial Management and Securities...

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