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Short-Term finance and the Management of Working Capital Essay

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Short-term finance and the management of working capital
Learning objectives
After studying this chapter, you should have achieved the following learning objectives:


an appreciation of the importance of working capital management in ensuring the profitability and liquidity of a company; the ability to describe the cash conversion cycle and to explain its significance to working capital management; an understanding of the need for working capital policies concerning the level of investment in current assets, and of the significance of aggressive, moderate and conservative approaches to working capital management; an understanding of the link between the sources of short-term finance available to a company and working capital policies concerning the financing of current assets; the ability to describe and discuss a range of methods for managing inventory, cash, trade receivables and trade payables; the ability to evaluate, at an introductory level, the costs and benefits of proposed changes in working capital policies; an understanding of how factoring and invoice discounting can assist in the management of working capital.
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Chapter 3 Short-term finance and the management of working capital

Introduction
Long-term investment and financing decisions give rise to future cash flows which, when discounted by an appropriate cost of capital, determine the market value of a company. However, such long-term decisions will only result in the expected benefits for a company if attention is also paid to short-term decisions regarding current assets and liabilities. Current assets and liabilities, that is, assets and liabilities with maturities of less than one year, need to be carefully managed. Net working capital is the term given to the difference between current assets and current liabilities: current assets may include inventories of raw materials,...

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MLA Citation

"Short-Term finance and the Management of Working Capital". Anti Essays. 20 Oct. 2018

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APA Citation

Short-Term finance and the Management of Working Capital. Anti Essays. Retrieved October 20, 2018, from the World Wide Web: https://www.antiessays.com/free-essays/Short-Term-nance-And-The-Management-Of-570485.html