Learning Outcomes

Upon successful completion, the student will be able to:

• Identify working capital management considerations for permanent components, the impact of sales/production schedules and liquidity versus risk.
• Solve financial ratios that measure profitability, asset utilization, liquidity, and debt utilization.
• Prepare a cash budget and explain its various uses by a firm.
• Identify the cash flow cycle of the firm.
• Differentiate the risks and profitability of financing assets in terms of hedging.
• Analyze the major elements of cash management.
• Interpret accounts receivable as an investment from the firm's credit policies, outline the considerations in granting credit, and evaluate a credit decision that changes credit terms to stimulate sales.
• Assess trade credit as a form of financing and calculate its cost if the discount is forgone.
• Analyze short term bank financing and calculate interest rates for various types of loans.
• Evaluate inventory as an investment and apply techniques to reduce the costs of this investment.

Effective as of Winter 2016