chap026 - Chapter 26 SHORT-TERM FINANCE AND PLANNING SLIDES...

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Chapter 26 SHORT-TERM FINANCE AND PLANNING SLIDES CHAPTER WEB SITES Section Web Address End-of-chapter material www.mhhe.com/edumarketinsight CHAPTER ORGANIZATION 26.1 Tracing Cash and Net Working Capital 26.2 Defining Cash in Terms of Other Elements The Sources and Uses of Cash 26.3 The Operating Cycle and the Cash Cycle 26.1 Key Concepts and Skills 26.2 Chapter Outline 26.3 Tracing Cash and Net Working Capital 26.4 Balance Sheet Model of the Firm 26.5 Defining Cash in Terms of Other Elements 26.6 Defining Cash in Terms of Other Elements 26.7 The Operating Cycle and the Cash Cycle 26.8 The Operating Cycle and the Cash Cycle 26.9 Example 26.10 Example 26.11 Example 26.12 Some Aspects of Short-Term Financial Policy 26.13 Size of Investment in Current Assets 26.14 Carrying Costs and Shortage Costs 26.15 Appropriate Flexible Policy 26.16 Appropriate Restrictive Policy 26.17 Alternative Financing Policies 26.18 Cash Budgeting 26.19 Example 26.20 Example 26.21 Example 26.22 Example 26.23 The Short-Term Financial Plan 26.24 Quick Quiz
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A-50 CHAPTER 26 26.4 Some Aspects of Short-Term Financial Policy The Size of the Firm’s Investment in Current Assets Alternative Financing Policies for Current Assets Which is Best? 26.5 Cash Budgeting Cash Outflow The Cash Balance 26.6 The Short-Term Financial Plan Unsecured Loans Secured Loans Other Sources ANNOTATED CHAPTER OUTLINE Slide 26.0 Chapter 26 Title Slide Slide 26.1 Key Concepts and Skills Slide 26.2 Chapter Outline Lecture Tip: For some reason, many students (and some faculty) view short-term finance generally, and working capital management specifically, as less important than capital budgeting or the risk-return relationship. You may find it useful to emphasize the importance of short-term finance in introducing the current chapter. First, discussions with CFOs quickly lead to the conclusion that, as important as capital budgeting and capital structure decisions are, they are made less frequently, while the day-to-day complexities involving the management of net working capital (especially cash and inventory) consume tremendous amounts of management time. Second, it is clear that while poor long-term investment and financing decisions will adversely impact firm value, poor short-term financial decisions will impair the firm’s ability to remain operating . Finally, good working capital decisions can also have a major impact on firm value. 26.1. Tracing Cash and Net Working Capital Slide 26.3 Tracing Cash and Net Working Capital Slide 26.4 Balance Sheet Model of the Firm 26.2. Defining Cash in Terms of Other Elements
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CHAPTER 26 A-51 Net working capital + Fixed assets = Long-term debt + Equity Net working capital = Cash + Other current assets – Current liabilities Substituting NWC into the first equation and rearranging; Cash = Long-term debt + Equity + Current Liabilities – Other current assets – Fixed assets Slide 26.5 – Slide 26.6 Defining Cash in Terms of Other Elements .A The Sources and Uses of Cash
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This note was uploaded on 12/21/2011 for the course NIKA 101 taught by Professor Temur during the Spring '11 term at Acton School of Business.

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chap026 - Chapter 26 SHORT-TERM FINANCE AND PLANNING SLIDES...

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