Working Capital Management

Slides:

Advertisements

Similar presentations

Chapter 30 Short-Term Financial Planning

Advertisements

18-0 The Cash Budget 18.4 Forecast of cash inflows and outflows over the next short-term planning period Primary tool in short-term financial planning.

Quarterly sales amount projected

PRINCIPLES OF WORKING CAPITAL MANAGEMENT.

Financial Management Liliya N. Zhilina, World Economy and Inrernational Relations Department, Vladivostok State University of Economic and Services (VSUES).

 Financial Analysis and Planning Principles of Corporate Finance Brealey and Myers Sixth Edition Slides by Matthew Will Chapter 28 © The McGraw-Hill Companies,

Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1999 Financial Statement Analysis © The McGraw-Hill Companies, Inc., Part One: Financial Accounting.

Short-Term Finance and Planning

Copyright © 2006 McGraw Hill Ryerson Limited19-1 prepared by: Sujata Madan McGill University Fundamentals of Corporate Finance Third Canadian Edition.

NextGen Accounts Payable Local Government Corporation.

GLENCOE / McGraw-Hill. The Statement of Cash Flows.

Current Asset Management

SHORT-TERM FINANCIAL PLANNING. Scope of Short-Term Planning Focus on current assets and liabilities- items that within a year translate into cash Net.

19- 1 McGraw Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved Fundamentals of Corporate Finance Sixth Edition Richard.

Introduction & Financial Analysis Objectives for a firm? Quick Review of Financial Statements Financial Analysis.

CENTURY 21 ACCOUNTING © Thomson/South-Western LESSON 17-2 Calculating Earnings Performance and Efficiency Analysis.

Working Capital Policy

The Statement of Cash Flows Cash, liquidity, and the cash flow cycle The cash flow statement preparing a cash flow statement –It’s as easy as 1,2,3.

Chapter 41 Cash, Short-term Investments and Accounts Receivable Chapter 4.

Financial Management 1 Zaroni Samadi 23 June 2010.

Copyright ©2003 South-Western/Thomson Learning Chapter 15 Financial Forecasting and Working Capital Policy.

EVALUATING FINANCIAL PERFORMANCE

Ch3. Analysis of Financial Statement. 1. Why we need ratios? Specialized information Comparison Issue Predicting future performance 1)5 types of financial.

Financial Planning. Portions taken from Emery and Finnerty: Corporate Financial Management – Chapter 22 Edited and expanded by Del Hawley.

Chapter 41 Cash, Short-term Investments and Accounts Receivable Chapter 4.

PRINCIPLES OF WORKING CAPITAL MANAGEMENT

1 Understanding the Financial Statements Lecture No.35 Professor C. S. Park Fundamentals of Engineering Economics Copyright © 2005.

Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Financial Statement Analysis K R Subramanyam John J Wild.

1 CHAPTER 22 Working Capital Management. 2 Topics in Chapter Alternative working capital policies Cash, inventory, and A/R management Accounts payable.

Working Capital Management FIN 340 Prof. David S. Allen Northern Arizona University.

1 Chapter 9 Analysis of Financial Statements. 2 I. General Accounting Principles A. Reliability B. Understandability C. Comparability.

DKH Enterprises, Inc. Managing Cash: A Startup’s First Financial Priority “cash and no profits is better than profits and no cash”

Principles of Working Capital Management

Principles of Working Capital Management  Concept of working capital  Operating and cash conversion cycle  Determinants of working capital  Estimating.

JOURNAL ENTRIES JOE’S BARBER SHOP RECEIVED $40,00 CASH FROM OWNERS AND ISSUED COMMON STOCK TO THEM.

Working Capital Management Cash Management by Imran Khan.

Financial Planning. Portions taken from Emery and Finnerty: Corporate Financial Management – Chapter 22 Edited and expanded by Del Hawley.

Principles of Working Capital Management

Working Capital.

Working capital Working capital refers to the investment made by firm in current asset such as cash, accounts receivables, inventories and marketable securities.

Chapter 31 Principles PrinciplesofCorporateFinance Ninth Edition Short Term Financial PLanning Slides by Matthew Will Copyright © 2008 by The McGraw-Hill.

WORKING CAPITAL TERMINOLOGY Calculating the Targeted CCC.

E5-2 Example. a) Pippen Company Transactions 1.DRCR Accounts Receivable400,000 Sales Revenue400,000 - To record sale on account Cost of Goods Sold320,000.

Corporate Finance Working Capital Management Shakib Shibly Promy Md. Sariful Islam

Chapter 19 Fundamentals of Corporate Finance Fifth Edition Slides by Matthew Will McGraw-Hill/Irwin Copyright © 2007 by The McGraw-Hill Companies, Inc.

Introduction to Accounting Preparing for a User’s Perspective Introduction to Accounting Preparing for a User’s Perspective Free Jan

 Short Term Financial Planning Principles of Corporate Finance Brealey and Myers Sixth Edition Slides by Matthew Will Chapter 29 © The McGraw-Hill Companies,

CHAPTER 16 Managing Current Assets

Financial Statement Analysis

The Balance Sheet The balance sheet, together with the income statement and cash flow statement, make up the cornerstone of any company’s financial.

Supply Chains and Working Capital Management

Introduction to Accounting Preparing for a User’s Perspective

Unit 6 Bowling Review Accounting.

Short-Term Finance and Planning

Managing the Firm’s Assets

PRINCIPLES OF WORKING CAPITAL MANAGEMENT

Introduction to Accounting Preparing for a User’s Perspective

Cash and Working Capital Management

Learning Objectives Define working capital management. (LO1)

Cash Conversion Cycle

There is no “Bob” narration on this series of slides (yea!)

MGT601 SME MANAGEMENT.

Working Capital Management

Working Capital Management

Financial Analysis Quick ratio: ($22,000+ $41,500)/

Working Capital Management

FINANCIAL STATEMENT ANALYSIS

CHAPTER 15 Managing Current Assets

Working capital Introduction

TRANSACTION CYCLES Third Lecture

Presentation transcript:

Working Capital Management Cash Management by Imran Khan

What is cash conversion cycle? Cash conversion cycle as discussed in the previous lecture emphasize on the length of time between when the firm makes payments and when it receives cash as inflows.

Items involved in the cash conversion cycle Inventory conversion period: It refers to the average time needed to convert materials into finished goods and then sell these goods out. Inventory conversion period (days)= Inventory/ sales per day

Receivables collection period It refers to the average length of time required to convert a company’s receivables into cash or in other words it is the time required to collect cash following a sale. Also known as Days Sales Outstanding (D.S.O) Receivables collection period= receivables sales/365

Payables deferral period It refers to the average length of time between the purchase of labor and materials and the payment of cash for them.

Summing up the above items When the three items from the previous slides are summed up, it results in cash conversion cycle. Hence, Inventory conversion period+ receivables collection period- Payables deferral period= Cash conversion cycle

Question Medwig Corporation has a DSO of 17 days. The company averages $3500 in credit sales each day. What is the company’s average accounts receivable?