tailieunhanh - Lecture Fundamentals of corporate finance (3/e): Chapter 14 - Robert Parrino, David S. Kidwell, Thomas Bates

Chapter 14, working capital management. After studying this chapter you will be able to: The venture capital market and its role in the financing of new, highrisk ventures; how securities are sold to the public and the role of investment banks in the process; initial public offerings and some of the costs of going public; how rights are issued to existing shareholders and how to value those rights. | Fundamentals of Corporate Finance, 3/e Robert Parrino, . David S. Kidwell, . Thomas W. Bates, . 1 Copyright© 2015 John Wiley & Sons, Inc. Chapter 14: Working Capital Management Learning Objectives Define net working capital, discuss the importance of working capital management, and compute a firm’s net working capital Define the operating and cash conversion cycles, explain how they are used, and compute their values for a firm Discuss the relative advantages and disadvantages of pursing (1) flexible and (2) restrictive current asset management strategies Copyright© 2015 John Wiley & Sons, Inc. 3 Learning Objectives Explain how accounts receivable are created and managed, and compute the cost of trade credit Explain the trade-off between carrying costs and reorder costs, and compute the economic order quantity for a firm’s inventory costs Define cash collection time, discuss how a firm can minimize this time, and compute the economic costs and benefits of a lock box Describe three current asset financing strategies and discuss the main sources of short-term financing Copyright© 2015 John Wiley & Sons, Inc. 4 The Basics of Working Capital Working capital management involves two key issues What is the appropriate amount and mix of current assets for the firm to hold? How should these current assets be financed? The Basics of Working Capital Terms and Concepts Current assets are cash and other assets that the firm expects convert into cash in a year or less Current liabilities (or short-term liabilities) are obligations that the firm expects to pay off in a year or less Working capital is the funds invested in a company’s cash account, account receivables, inventory, and other current assets (also called gross working capital) The Basics of Working Capital Terms and Concepts Net working capital (NWC) refers to the difference between current assets and current liabilities; it is important because it is a measure of liquidity and represents the net . | Fundamentals of Corporate Finance, 3/e Robert Parrino, . David S. Kidwell, . Thomas W. Bates, . 1 Copyright© 2015 John Wiley & Sons, Inc. Chapter 14: Working Capital Management Learning Objectives Define net working capital, discuss the importance of working capital management, and compute a firm’s net working capital Define the operating and cash conversion cycles, explain how they are used, and compute their values for a firm Discuss the relative advantages and disadvantages of pursing (1) flexible and (2) restrictive current asset management strategies Copyright© 2015 John Wiley & Sons, Inc. 3 Learning Objectives Explain how accounts receivable are created and managed, and compute the cost of trade credit Explain the trade-off between carrying costs and reorder costs, and compute the economic order quantity for a firm’s inventory costs Define cash collection time, discuss how a firm can minimize this time, and compute the economic costs and benefits of a lock box .

• Tài chính doanh nghiệp
• Corporate finance
• Fundamentals of corporate finance
• Capital budgeting decisions
• Capital management
• Financing decisions
• Working capital management