CH16ManagingCurrentAssets(财务管理,英文版)

16-1Copyright©2001byHarcourt,Inc.Allrightsreserved.CHAPTER16ManagingCurrentAssetsAlternativeworkingcapitalpoliciesCashmanagementInventorymanagementAccountsreceivablemanagement16-2Copyright©2001byHarcourt,Inc.Allrightsreserved.DefinitionsGrossW.C.:Totalcurrentassets.NetW.C.:Currentassets–Currentliabilities.W.C.Policy:Decisionsasto(1)thelevelofeachtypeofcurrentasset,and(2)howcurrentassetswillbefinanced.W.C.Management:Controllingcash,inventories,andA/R,plusS-Tliabilitymanagement.16-3Copyright©2001byHarcourt,Inc.Allrightsreserved.SKIappearstohavelargeamountsofworkingcapitalgivenitslevelofsales.SelectedRatios--SKIInc.SKIIndustryCurrent1.75x2.25xQuick0.83x1.20xDebt/Assets58.76%50.00%Turnoverofcash&securities16.67x22.22xDSO(days)45.0032.00Inv.turnover4.82x7.00xF.A.turnover11.35x12.00xT.A.turnover2.08x3.00xProfitmargin2.07%3.50%ROE10.45%21.00%16-4Copyright©2001byHarcourt,Inc.Allrightsreserved.HowdoesSKI’sworkingcapitalpolicycomparewiththeindustry?Workingcapitalpolicyisreflectedincurrentratio,quickratio,turnoverofcashandsecurities,inventoryturnover,andDSO.TheseratiosindicateSKIhaslargeamountsofworkingcapitalrelativetoitslevelofsales.SKIiseitherveryconservativeorinefficient.16-5Copyright©2001byHarcourt,Inc.Allrightsreserved.IsSKIinefficientorjustconservative?Aconservative(relaxed)policymaybeappropriateifitleadstogreaterprofitability.However,SKIisnotasprofitableastheaveragefirmintheindustry.Thissuggeststhecompanyhasexcessiveworkingcapital.16-6Copyright©2001byHarcourt,Inc.Allrightsreserved.CashConversionCycleCCC=+–CCC=+–CCC=+45–30CCC=75+45–30CCC=90days.InventoryconversionperiodReceivablescollectionperiodPayablesdeferralperiodDaysperyearInv.turnoverPayablesdeferralperiodDayssalesoutstanding3604.8216-7Copyright©2001byHarcourt,Inc.Allrightsreserved.Cashdoesn’tearnaprofit,sowhyholdit?1.Transactions:Musthavesomecashtooperate.2.Precaution:“Safetystock.”Butlessenedbylineofcredit,marketablesecurities.3.Compensatingbalances:Forloansand/orservicesprovided.4.Speculation:Totakeadvantageofbargains,totakediscounts,etc.Reducedbycreditlines,securities.16-8Copyright©2001byHarcourt,Inc.Allrightsreserved.What’sthegoalofcashmanagement?Tomeetaboveobjectives,especiallytohavecashfortransactions,yetnothaveanyexcesscash.Tominimizetransactionsbalancesinparticular,andalsoneedsforcashtomeetotherobjectives.16-9Copyright©2001byHarcourt,Inc.Allrightsreserved.WaystoMinimizeCashHoldingsUsealockbox.Insistonwiretransfersfromcustomers.Synchronizeinflowsandoutflows.Usearemotedisbursementaccount.(More…)16-10Copyright©2001byHarcourt,Inc.Allrightsreserved.Increaseforecastaccuracytoreduceneedfor“safetystock”ofcash.Holdmarketablesecurities(alsoreducesneedfor“safetystock”).Negotiatealineofcredit(alsoreducesneedfor“safetystock”).16-11Copyright©2001byHarcourt,Inc.Allrightsreserved.Whatis“Float”andhowisitaffectedbythefirm’scashmanager?Floatisthedifferencebetweencashasshownonthefirm’sbooksandonitsbank’sbooks.IfSKIcollectschecksin2daysbutthosetowhomSKIwriteschecksdon’tprocessthemfor6days,thenSKIwillhave4daysofnetfloat.(More…)16-12Copyright©2001byHarcourt,Inc.Allrightsreserved.Ifafirmwith4daysofnetfloatwritesandreceives$1millionofchecksperday,itwouldbeabletooperatewith$4millionlesscapitalthanifithadzeronetfloat.16-13Copyright©2001byHarcourt,Inc.Allrightsreserved.CashBudget:ThePrimaryCashManagementToolPurpose:Forecastscashinflows,outflows,andendingcashbalances.Usedtoplanloansneededorfundsavailabletoinvest.Timing:Daily,weekly,ormonthly,dependinguponpurposeofforecast.Monthlyforannualplanning,dailyforactualcashmanagement.16-14Copyright©2001byHarcourt,Inc.Allrightsreserved.DataRequiredforCashBudget1.Salesforecast.2.Informationoncollectionsdelay.3.Forecastofpurchasesandpaymentterms.4.Forecastofcashexpenses,taxes,etc.5.Initialcashonhand.6.Targetcashbalance.16-15Copyright©2001byHarcourt,Inc.Allrightsreserved.SKI’sCashBudgetforJanuaryandFebruaryNetCashInflowsJanuaryFebruaryCollections$67,651.95$62,755.40Purchases44,603.7536,472.65Wages6,690.565,470.90Rent2,500.002,500.00Totalpayments$53,794.31$44,443.55NetCF$13,857.64$18,311.8516-16Copyright©2001byHarcourt,Inc.Allrightsreserved.CashBudget(Continued)JanuaryFebruaryCashatstartifnoborrowing$3,000.00$16,857.64NetCF(slide15)13,857.6418,311.85Cumulativecash$16,857.64$35,169.49Less:targetcash1,500.001,500.00Surplus$15,357.64$33,669.4916-17Copyright©2001byHarcourt,Inc.Allrightsreserved.Shoulddepreciationbeexplicitlyincludedinthecashbudget?No.Depreciationisanoncashcharge.Onlycashpaymentsandreceiptsappearoncashbudget.However,depreciationdoesaffecttaxes,whichappearinthecashbudget.16-18Copyright©2001byHarcourt,Inc.Allrightsreserved.Whataresomeotherpotentialcashinflowsbesidescollections?Proceedsfromthesaleoffixedassets.Proceedsfromstockandbondsales.Interestearned.Courtsettlements.16-19Copyright©2001byHarcourt,Inc.Allrightsreserved.Howcaninterestearnedorpaidonsurplus/loanbeincorporatedinthecashbudget?Interestearned:Addlineinthecollectionssection.Interestpaid:Addlineinthepaymentssection.Foundasinterestrate