chap020Working Capital Management(公司金融原理台湾大学,Matthew Will)概要1.pptVIP

Topics Covered Accounts Receivable and Credit Policy Credit Agreements Inventory Management Cash Management Investing Idle Cash: The Money Market A/R and Credit Policy Credit Management Steps Establish terms of sale What form of IOU will you require? Perform a credit analysis Create a credit policy Develop a collection policy Terms of Sale Terms of Sale - Credit, discount, and payment terms offered on a sale. Example - 5/10 net 30 5 - percent discount for early payment 10 - number of days that the discount is available net 30 - number of days before payment is due Terms of Sale A firm that buys on credit is in effect borrowing from its supplier. It saves cash today but will have to pay later. This, of course, is an implicit loan from the supplier. We can calculate the implicit cost of this loan Terms of Sale Example - On a $100 sale, with terms 5/10 net 60, what is the implied interest rate on the credit given? Credit Agreements Terminology open account promissory note commercial draft sight draft time draft trade acceptance banker’s acceptance Credit Analysis Credit Analysis - Procedure to determine the likelihood a customer will pay its bills. Credit agencies, such as Dun Bradstreet provide reports on the credit worthiness of a potential customer. Financial ratios can be calculated to help determine a customer’s ability to pay its bills. Credit Analysis Numerical Credit Scoring categories The customer’s character The customer’s capacity to pay The customer’s capital The collateral provided by the customer The condition of the customer’s business Credit Analysis Multiple Discriminant Analysis - A technique used to develop a measurement of solvency, sometimes called a Z Score. Edward Altman developed a Z Score formula that was able to identify bankrupt firms approximately 95% of the time. Credit Analysis Example - If the Altman Z score cut off for a credit worthy business is 2.7 or higher, would we accept the following client? Credit Analysis Example - If th