《财务管理专业英语》教学课件11.ppt

11.1 Introduction to Working Capital Management 11.2 Cash Management 11.3 Accounts Receivable Management 11.4 Inventory Management INTRODUCTION TO WORKING CAPITAL MANAGEMENT Working capital management is the administration of the firm’s current assets and current liabilities. Determining the firm’s optimal investment in working capital involves a trade-off between liquidity and profitability. Financial managers should minimize the costs associated with working capital without jeopardizing the liquidity need for continuing operations. INTRODUCTION TO WORKING CAPITAL MANAGEMENT Approaches to Working Capital Management relaxed or conservative approach restricted or aggressive approach moderate approach CASH MANAGEMENT 1. Determining appropriate cash balances; 2. Investing idle cash; 3. Managing collections and disbursements. CASH MANAGEMENT Three Motives for Holding Cash Speculative Motive Precautionary Motive Transaction Motive CASH MANAGEMENT Determining Appropriate Cash Balances Baumol cash management model Miller-Orr cash management model CASH MANAGEMENT Investing Idle Cash Factors when choosing among the variety of short-term securities available Marketability Maturity Default risk Taxes CASH MANAGEMENT Types of Money Market Securities US Treasury Bills Short-term tax exempt instruments Commercial paper Negotiable certificates of deposit (CDs) Bankers’ acceptances Repurchase agreement CASH MANAGEMENT Managing Collections and Disbursements Float arises from a delay in the payment system. The three principal sources of delay are: 1. Mail float: the time when a check is in the mail; 2. Processing float: the time required to process a check after it is received; 3. Clearing time float: the time required for a check to clear through the banking system and to reduce the paying firm’s account. CASH MANAGEMENT Managing Collections and Disbursements Accelerating Collections lock box system concentration banking Slowi