chap018公司理财课件.pptVIP

Topics Covered Links Between Long-Term and Short-Term Financing Working Capital Tracing Changes in Cash and Working Capital Cash Budgeting A Short-Term Financing Plan Sources of Short-Term Financing The Cost of Bank Loans Firm’s Cumulative Capital Requirement Working Capital Net Working Capital - Current assets minus current liabilities. Often called working capital. Cash Conversion Cycle - Period between firm’s payment for materials and collection on its sales. Carrying Costs - Costs of maintaining current assets, including opportunity cost of capital. Shortage Costs - Costs incurred from shortages in current assets. Working Capital Simple Cycle of operations Working Capital Working Capital Example - Cash Conversion Cycle Given the aggregate balance sheet and income statement for US Manufacturing firms, calculate the cash conversion cycle. Working Capital Example - Cash Conversion Cycle Given the aggregate balance sheet and income statement for US Manufacturing firms, calculate the cash conversion cycle. Working Capital Example - Cash Conversion Cycle Given the aggregate balance sheet and income statement for US Manufacturing firms, calculate the cash conversion cycle. Working Capital Example - Cash Conversion Cycle Given the aggregate balance sheet and income statement for US Manufacturing firms, calculate the cash conversion cycle. Working Capital Example - Cash Conversion Cycle Given the aggregate balance sheet and income statement for US Manufacturing firms, calculate the cash conversion cycle. Changes in Cash W.C. Example - Dynamic Mattress Company Changes in Cash W.C. Example - Dynamic Mattress Company Changes in Cash W.C. Example - Dynamic Mattress Company Changes in Cash W.C. Example - Dynamic Mattress Company Dynamic used cash as follows Paid $1 mil dividend. Repaid $5 mil short term bank loan Invested $14 mil Purchased $5 mil of marketable securities Accounts receivable expanded by $5 mil Cash Budgeting Steps to preparing a cash budget Step