文档介绍：Chapter 18
Short-term financial planning
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Objectives
Understand why the firm needs to invest working capital.
Show how long-term financing policy affects short-term financing requirements.
Trace a firm’s sources and uses of cash and evaluate its need for short-term borrowing.
Develop a short-term financing plan that meets the firm’s need for cash.
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Content
Links between long-term and short-term financing
Working capital
Tracing changes in cash and working capital
Cash budgeting
A short-term financing plan
Sources of short-term financing
The cost of bank loans
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The firm’s total capital requirement grows over time. It also exhibits
seasonal variation around the trend.
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The total capital requirement can be met through either long- or short-term financing.
When long-term financing does not cover the total capital requirement, the firm must raise short-term capital to make up the difference.
When long-term financing more than covers the total capital requirement, the firm has surplus cash available for short-term investment.
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Relaxed strategy, where the firm is always a short-term lender. It implies a permanent short-term cash surplus. This surplus will be invested in marketable securities.
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Middle-of-the-road policy, The firm has spare cash that it can lend out during the part of the year when total capital requirements are relatively low, but it is a borrower during the rest of the year when capital requirements are relatively high.
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Restrictive policy, where the firm is always a short-term borrower.
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What is the best level of long-term financing relative to the total capital requirement?
Matching maturities
Permanent working capital requirements
forts of surplus cash
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Content
Links between long-term and short-term financing
Working capital
Tracing changes in cash and workin