Finance Lecture Notes

Finance Lecture - 4 Working Capital Management a How to manage the short-term assets of your business i Accounting – cash inventory short-term

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Finance Lecture Notes 07/09/2010 06:41:00 September 7 th , 2010 - First Day – Intro 1) Course requirements a) Accounting b) Corporate finance – what is it? i) How do you pick investment projects ii) Our focus will be on how to pick good investment projects when faced with a  list of possible investment projects iii) Limited resources into what projects and why? 2) Capital budgeting a) The most important decision you will have to make – deciding where to invest  your money 3) Capital Structure of the Firm a) Commercial paper i) Debt b) Sell Equity – different because you charge interest and people who invest own  part of the company c) Why did Lehman Brothers go under? i) Heavily leveraged capital structure
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Background image of page 2
Background image of page 3
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: 4) Working Capital Management a) How to manage the short-term assets of your business i) Accounting – cash, inventory, short-term debt (commercial paper – usually overnight business), Account Payable, Account Receivable (1) Lehman also used too much short-term debt to leverage their long-term assets (debt term is usually 30 years) (2) Mismatch of maturity, important to know how to use debt 5) Examples a) Capital budgeting i) 2005: eBay pays $2.6 billion to buy Skype ii) 2009: eBay sells Skype stake for $1.9B iii) share repurchase and dividend payout (1) two ways you can return $ - cash management 07/09/2010 06:41:00 ← 07/09/2010 06:41:00 ←...
View Full Document

This note was uploaded on 12/12/2010 for the course FIN 300 taught by Professor Mishra during the Fall '08 term at University of Michigan.

Page1 / 3

Finance Lecture - 4 Working Capital Management a How to manage the short-term assets of your business i Accounting – cash inventory short-term

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online