chapter 9Cash and Marketable Securities Management(财务管理,Gregory A. Kuhlemeyer)概要1.ppt

Chapter 9 Cash and Marketable Securities Management Cash and Marketable Securities Management Motives for Holding Cash Cash Cycle Target Cash Balance Float Management Cash Budget Investment in Marketable Securities Motives for Holding Cash Transactions Motive -- to meet payments arising in the ordinary course of business Speculative Motive -- to take advantage of temporary opportunities Precautionary Motive -- to maintain a cushion or buffer to meet unexpected cash needs Cash Flow Time Line Operating Cycle vs Cash Cycle Operating cycle - the time period from commitment of cash for purchases until the collection of receivables resulting from the sale of goods/services. Operating cycle = Inventory period + A/cs receivable period Cash cycle - the time period from the actual outlay of cash for purchases until the collection of receivables. Cash cycle = Operating cycle - A/cs payable period Example Example - Operating Cycle Example - Operating Cycle Example - Operating Cycle Example - Cash Cycle Example - Cash Cycle Target Cash Balance Carrying costs increase with the level of investment in current assets, and include the costs of maintaining economic value and opportunity costs. Shortage costs decrease with increases in the level of investment in current assets, and include trading costs and the costs related to being short of the current asset. For example, sales lost as a result of a shortage of finished goods inventory. The BAT Model The BAT Model Miller-Orr Model Assumes that, if left unmanaged, a company’s cash balance would follow a random walk with zero drift. Cash balance is allowed to wander freely between an upper limit (U*) and a lower limit (L). If cash holdings reach U*, management intervenes by withdrawing U*-C* dollars to return the cash balance to the target level C*. If cash balance reaches L, management intervenes by injecting C* dollars to return the cash balance to the target level C*. Miller-Orr Model Miller-Orr Model Example Miller-Orr Mod