chap_17 - Chapter 17 WORKING CAPITAL MANAGEMENT SLIDES 17.1...

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Chapter 17 WORKING CAPITAL MANAGEMENT SLIDES CHAPTER WEB SITES Web sites may be referenced more than once in a chapter. This table just includes the section for the first reference. Chapter Section Web Address 17.1 www.epaymentsystems.com www.cfoasia.com 17.2 edge.lowe.org www.gtnews.com (must register to access the site) www.toolkit.cch.com/tools/tools.asp www.bloomberg.com 17.1 Key Concepts and Skills 17.2 Chapter Outline 17.3 Reasons for Holding Cash 17.4 Understanding Float 17.5 Example: Types of Float 17.6 Cash Collection 17.7 Cash Disbursements 17.8 Investing Cash 17.9 Figure 17.4 17.10 Characteristics of Short-Term Securities 17.11 Credit Management: Key Issues 17.12 The Cash Flows from Granting Credit 17.13 Components of Credit Policy 17.14 Terms of Sale 17.15 Example: Cash Discounts 17.16 Figure 17.5 17.17 Credit Analysis 17.18 Five Cs of Credit 17.19 Collection Policy 17.20 Inventory Management 17.21 Types of Inventory 17.22 Inventory Costs 17.23 Inventory Management 17.24 EOQ Model 17.25 Example: EOQ 17.26 Extensions 17.27 Quick Quiz
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A-208 WORKING CAPITAL MANAGEMENT 17.3 www.treasury.pncbank.com CHAPTER WEB SITES – CONTINUED Chapter Section Web Address 17.3 www.eycashmanagement.com www.ny.frb.org/pihome/addpub/credit.html www.nacm.org www.creditworthy.com www.dnb.com 17.4 www.simba.org What’s On the Web? www.chevron.com www.stls.frb.org CHAPTER ORGANIZATION 17.1 Float and Cash Management Reasons for Holding Cash Understanding Float 17.2 Cash Management: Collection, Disbursement, and Investment Cash Collection and Concentration Managing Cash Disbursements Investing Idle Cash 17.3 Credit and Receivables Components of Credit Policy Terms of the Sale Optimal Credit Policy Credit Analysis Collection Policy 17.4 Inventory Management The Financial Manager and Inventory Policy Inventory Types Inventory Costs 17.5 Inventory Management Techniques The ABC Approach The Economic Order Quantity Model Extensions to the EOQ Model Managing Derived-Demand Inventories ANNOTATED CHAPTER OUTLINE Slide 17.1 Key Concepts and Skills Slide 17.2 Chapter Outline
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CHAPTER 17 A-209 17.1. Float and Cash Management .A Reasons for Holding Cash Speculative motive – take advantage of unexpected opportunities Precautionary motive – cash for emergencies Lecture Tip, page 503: What is needed to satisfy the speculative and precautionary motives is an ability to pay quickly – a need that is met with liquidity. Although cash is the most liquid asset, assets such as marketable securities are near substitutes for cash. The ability to borrow quickly is also a close substitute for cash (having a line of credit, for example). Although holding cash and near-cash assets imposes opportunity costs on the firm, it can be shown that the existence of this “financial slack” is consistent with shareholder wealth maximization. The ability to take advantage of unexpected and often temporary, financial opportunities is clearly valuable to the firm. Myers and Majluf demonstrated in the Journal of Financial
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This note was uploaded on 05/01/2009 for the course FINC 106 taught by Professor Dr.nehale during the Spring '09 term at Baptist College of Health Sciences.

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chap_17 - Chapter 17 WORKING CAPITAL MANAGEMENT SLIDES 17.1...

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