文档介绍：Principles of Corporate Finance Chapter 29 Short Term Financial Planning
Slides by
Matthew Will
Short Term Financial Planning
Principles of Corporate Finance
Brealey and Myers Sixth Edition
Chapter 29
The McGraw-panies, Inc3>., 2000
Irwin/McGraw Hill
Topics Covered
Working Capital
Links Between Long-Term and Short-Term Financing
Tracing Changes in Cash and Working Capital
Cash Budgeting
A Short-Term Financing Plan
Working Capital
Net Working Capital - Current assets minus current liabilities. Often called working capital.
Cash Conversion Cycle - Period between firm’s payment for materials and collection on its sales.
Carrying Costs - Costs of maintaining current assets, including opportunity cost of capital.
Shortage Costs - Costs incurred from shortages in current assets.
Firm’s Cumulative Capital Requirement
Lines A, B, and C show alternative amounts of long-term finance.
Strategy A: A permanent cash surplus
Strategy B: Short-term lender for part of year and borrower for remainder
Strategy C: A permanent short-term borrower
A
B
C
Year 2
Year 1
Dollars
Cumulative
capital requirement
Time
Working Capital
Simple Cycle of operations
Cash
Working Capital
Simple Cycle of operations
Cash
Raw materials
inventory
Working Capital
Simple Cycle of operations
Cash
Finished goods
inventory
Raw materials
inventory
Working Capital
Simpl