1 Working Capital Management 2 Maturity Matching Concept A Current Assets B Long-term Assets C Current Liabilities D Permanent Debt Financing E Permanent Equity Financing A minus C Net Working Capital (NWC) F Temporary
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Presentation Transcript
01
1 Working Capital Management<br>
02
2 Maturity Matching Concept A – Current Assets
B – Long-term Assets
C – Current Liabilities
D – Permanent Debt Financing
E – Permanent Equity Financing
A minus C – Net Working Capital (NWC)
F – Temporary Financing “The line”<br>
03
Managing Cash Role of Cash
Transaction motive
Precautionary motive
Speculative motive
Payment Systems
Point-of-sale
Remote consumer transactions
Business transactions Cash Management Practices
Electronic payment
Cash concentration
Managing the float
Collection float
Disbursement float 3<br>
04
Investing Temporary Cash Surpluses 4 Why maintain a cash surplus?
Flexible maturity matching strategy
Accumulate cash for major expenditures
Invest the proceeds of a stock or bond issue until the funds are needed
