Short-Term
Financial Management
Chapter 8 The Payment System and Financial
Institution Relationships
Historical Check Clearing Process
The numbers on the bottom of checks are encoded in special ink (MICR
linemagnetic ink character recognition) and includ
Chapter 8:
1.
Recent evidence suggests that checks written in the U.S. are more
popular than ACH payments with a declining rate of 2% per year.
1-a. Recent evidence suggests that checks written in the U.S. are declining in
importance, relative to electron
Short-Term
Financial Management
Chapter 8 The Payment System and Financial
Institution Relationships
Historical Check Clearing Process
The numbers on the bottom of checks are encoded in special ink
(MICR linemagnetic ink character recognition) and includ
Short-Term
Financial Management
Chapter 9 Cash Collection Systems
Cash Flow Timeline
The cash
conversion
period is the
time between
when cash is
received
versus paid.
The firm is a system of cash flows.
These cash flows are unsynchronized and
uncertain.
Short-Term
Financial Management
Chapter 15 Short-Term Financing
Short-Term Financing
Firms finance operations from short and long-term sources.
There is a link between short and long-term financing decisions
arising from a firm's cumulative capital requ
Short-Term
Financial Management
Chapter 11 Cash Disbursement Systems
Cash Disbursement
Once a firm writes a check, it must maintain adequate
balances to cover it.
Generally, the firm maintains these funds on deposit, even
though disbursement float resul
Chapter 8
Chapter 8:
1.
In September, the Johnson Company utilizes direct sends
for which its bank charges fees of $100. The bank's
earned credit ratio and reserve requirement are 5% and
12%, respectively. What is the minimum balance
required to compensat
PV= FV/(1+i)n
FVN= PV(1 + I)N
CV = s/X
X^2 is chi square test
r= (Pt Pt-1+Dt)/ Pt-1)
T
2
R
t
NWC= CA-CL
2
t 1
T
T
2
R
t
2
s
R
Current Ratio= CA/CL
2
bportfolio = wj*b
t 1
s s
Quick Ratio= (CA-Inv.)/ CL
T1
Inv. Turnover= Sales/ Inv.
2
FA turnover
Portfolio Return and Risk
FIN 3309: Excel Exercises
1. Suppose that you have $10,000 available for investment purposes. Your stockbroker has
suggested that you invest in either stock A or stock B, but you are concerned about the riskiness
of these stocks.
Correlation and Correlation
1. The following table shows the sample correlations between, the monthly returns for four
different mutual funds and the S&P 500. The correlations are based on 36 monthly observations.
The funds re s followed.
Fund 1
Fund 2
Fu
PORTFOLIO RISK AND RETURN
FIN 3309
RETURN ON FINANCIAL ASSETS
Total Return
Periodic
Income
Capital Gain or
Loss
HOW DOES THE WILLINGNESS TO TAKE
RISK DIFFER FROM THE ABILITY TO BEAR
RISK?
Willingness to
Take Risk
Personality
type?
Self-esteem?
Inclination
Credit Approval Decisions
N
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
Homeowner Credit Score Years of Credit History Revolving Balance
Y
Y
Y
N
N
Y
N
N
Y
Y
Y
Y
Y
N
Y
Y
N
N
Hypothesis Testing
Chapter 6, and 7
Statistical Inference
Statistical inference is the process of drawing
conclusions about populations from sample data.
Hypothesis testing is a technique that allows you to
draw valid statistical conclusions about the val
Credit Approval Decisions
N
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
Homeowner Credit Score Years of Credit History Revolving Balance
Y
Y
Y
N
N
Y
N
N
Y
Y
Y
Y
Y
N
Y
Y
N
STATISTICAL
CONCEPTS
INTRODUCTION
Chapter 3
Section 1 and 2
Introduction to Statistics
The term statistics can have two broad meanings, one
referring to data and the other to method.
The science of collectiong, organizing, presenting, analyzing,
and int
PROBABILITY CONCEPTS
Chapter 4
Uncertainties
Managers often base their decisions on an
analysis of uncertainties such as the following:
What are the chances that sales will decrease
if we increase prices?
What is the likelihood a new assembly method
metho
Time Value of Money
Chapter 1 and 2.2
Quantitative Investment Analysis
Time Value of Money
Time Value of Money (TVM) The idea that money available at the
present time is worth more than the same amount in the future due to its
potential earning capacity.
QUANTITATIVE METHODS
Introduction to Quantitative
Methods
QUALITATIVE VS. QUANTITATIVE
Qualitative Research is primarily exploratory research. It is used to gain an
understanding of underlying reasons, opinions, and motivations.
Deals with descriptions
Da
Hypothesis Testing
FIN 3309
1. Type of Statistics
1. _
2. _
i. _
ii. _
2. When you state a hypothesis is must be both _ and
_. There are 3 different ways to formulate hypothesis test:
1. _
2. _
3. _
3. The four test outcomes are
1. _
2. _
3. _
4. _
4. Ass
Probability Concept
FIN 3309
1. Properties of Probability function
_
_
2. 3 different types of probabilities
_
_
_
3. You have a bag of m&ms with only 12 left. There is 3 red, 4 yellow, 5 blue. What is the probability
that you will get a red m&m? Wha
EXCEL EXAMPLE 1
Annual Investment
Number of Years
Payments per Year
5,500
35
1
Fund
Rate of Return Terminal Value
Money Market
1.00%
Long-Term Bond
4.50%
Conservative Stock
6.50%
Aggressive Stock
11.00%
EXCEL EXAMPLE 2: Amortized Loan
Step 1:
N=
I=
PV=
PM
Chapter 3: Statistical Concepts Review
FIN 3309
1. What are the 2 types of Statistics
a. _
b. _
2. What is the difference between Sample data and Population data?
3. 4 Types of Measurement Scales (from weakest to strongest)
a. _
b. _
c. _
d. _
4. Advantag
Profitable and growing firms may run short on cash because:
Selected
Answer:
of spontaneous increases in receivables
and inventories
of rapid decrease in accounts receivables
Answers:
of rapid growth in accruals
of rapid growth in accounts payable
of spo
uestion 1
4 out of 4 points
A company's marketing manager is worried about _ stock-outs
while production manger is concerned with _ stock-outs.
Answer
s:
raw material, work-in-process
work-in-process, raw material
work-in-process, finished goods
finished
Question 5
10 out of 10 points
In September, the Johnson Company utilizes direct sends for which its bank
charges fees of $100. The bank's earned credit ratio and reserve
requirement are 5% and 12%, respectively. What is the minimum balance
required to co
Question 15
4 out of 4 points
The extent to which a company's assets exceed its liabilities is properly
referred to as:
Answer
s:
liquidity
solvency
financial
flexibility
the net liquid
balance
Question 16
0 out of 4 points
The sum of the delays in collec
Question 13
4 out of 4 points
The _ motive for holding inventory links the level of
inventory to ongoing anticipated demand.
Answer
s:
speculativ
e
precaution
ary
transactio
n
just-intime
Question 14
4 out of 4 points
The current ratio of a firm would be