Enables students to understand the relationships between current assets and current liabilities in different types of organizations, to appreciate the trade-offs inherent in a firm's working capital policy and to carry out a basic analysis of a firm's working capital management in comparison to others.
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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
Related Programs
FMGT 2540 is offered as a part of the following programs:
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