FIN%204260%20Chapter%201

FIN%204260%20Chapter%201 - 1 FIN-4260 Course Outline Part I...

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FIN-4260 Course Outline Part I Introduction to Liquidity Part II Management of Working Capital Part III Corporate Cash Management Part IV Part V 1
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Part I - Introduction to Liquidity Chapter 1 The Role of Working Capital Chapter 2 Solvency, Liquidity & Financial Flexibility Chapter 3 Valuation 2
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4 Functions of Finance not in text 1. Raise and allocate capital Capital Budgeting, capital structure, forms of financing 2. Maintain LIQUIDITY Having enough financial resources to cover financial obligations in a timely manner with minimal costs Low-moderate working capital
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The Role Of Working Capital Chapter 1 Agenda 4 Sales A/R Cash Inv Understand how the management of the current accounts (inventory, receivables, payables, and accruals) causes cash flows and profits to diverge.
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Working Capital Management 5 Short-Term Financial Managements (aka Working Capital Management) is the day-to- day management of the operating needs of a firm through its current assets and current liabilities. It involves managing cash, accounts receivable, inventory, and accounts payable.
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S.T. Finance Versus L.T. Finance 6 In other courses, you studied long-term financial decision-making. For example, the asset investment decision evaluated the cash flows associated with long-term capital budgeting projects. Short-term finance involve cash flows that occur within the year. Since these cash flows are unsynchronized and
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The Importance of Cash Cash flow is the lifeblood of a firm. Unprofitable companies can fail; similarly, profitable companies, if cash- strapped, can also fail. Profits and cash flow are highly correlated in short-term decision- making. Therefore, firms must manage cash 7
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Newspaper Headlines 8 The followi ng headli nes reinfor ce the import ance of cash and Time for Apple’s iCash Shell Expects Output, Cash Flow to Grow Facebook Cites Rapid Growth in Users, Cash Flow Xerox Seeks to Reassure Investors Over Cash Position Cisco Free Cash Flow
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Financial Statements 9 Financial statements report the performance of a firm, and include the: Balance sheet Income statement Statement of retained earnings Statement of cash flows These interrelated statements show where money came from, where it went, and where it is
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The Balance Sheet ( Stock ) 10 The balance sheet is a snapshot of the financial accounts of a firm.
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Assets 11 Assets are categorized as current (CA) or fixed (FA). Assets are listed on the balance sheet in order of liquidity. Frequently, more than one timeframe is presented for comparison. Current assets are expected
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FIN%204260%20Chapter%201 - 1 FIN-4260 Course Outline Part I...

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