Finance - Theproper Theproper managementof cashincludes ensuringyou haveenoughto coveryour companys needs,butnot toomuchto reducethe g

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Introduction to Finance Introduction to Finance
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Cash is an asset just like inventory  Cash is an asset just like inventory  and equipment for a business and equipment for a business
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The proper  The proper  management of  management of  cash includes  cash includes  ensuring you  ensuring you  have enough to  have enough to  cover your  cover your  company’s  company’s  needs, but not  needs, but not  too much to  too much to  reduce the  reduce the  growth in the  growth in the  value of your  value of your  company company
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Finance Role of  Finance
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The market  The market  price for  price for  homes fell  homes fell  up  to 35% up  to 35%
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$250,000 - $25,000 $225,000
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35% 35% $162,500 $162,500
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Finance Financia Plannin g Need for  Operatin g Funds Short- Term  Financin g Long- Term  Financin g Role of  Finance
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How can a  profitable  company be  forced to  close their  doors? Accounts  receivabl e Inventory
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Let’s discuss an issue! Let’s discuss an issue!
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Access the  Access the  following  following  reports from  reports from  Mike’s Bikes Mike’s Bikes Found under the Industry Reports menu Industry Benchmark Found under the Product Marketing Menu Market Summary Found under the Operations Management  menu Operations Report and the Factory Report
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Industry  Benchmar k Report Market  Summary Income  Statement Balance  Sheet Cash  Flow  Statement Reports to  focus on:
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Access the link in this  Access the link in this  module called “Results  module called “Results  from Rollover 3” to  from Rollover 3” to  review a rank order of  review a rank order of  the shareholder values  the shareholder values  for all teams in the  for all teams in the  class class
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Review the  Year Ahead  and  Scenario  information Revisit  firm’s  specific  strategy and  tactics
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Issues to be  considered: keep, abandon or update your  current model of mountain bike  considering the financial  consequences associated with the  liquidation of existing inventory if  you abandon this line of bikes and  the one-time cost if you add a new  model, along with capacity issues of  your plant in conjunction with  advertising and distributor support add a new line of bike, either road or  youth again considering the financial  consequences strategy with regards to the current  capacity and efficiency of your plant  given your plans regarding new  models or lines and excess capacity  with your one line of mountain bikes strategy regarding repurchasing  shares and paying dividends
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Review the  Year Ahead  and  Scenario  information Revisit  firm’s  specific  strategy and  tactics Communica te and make  specific  decisions
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New  decisions  to make  with  regards to: new model  and/or line shareholde rs
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This note was uploaded on 12/02/2010 for the course AFM 20220098 taught by Professor Sproule during the Fall '09 term at Waterloo.

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Finance - Theproper Theproper managementof cashincludes ensuringyou haveenoughto coveryour companys needs,butnot toomuchto reducethe g

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