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These flashcards will cover these topics:
Working Capital Policy (21)
A. Nature of Working Capital Policy (12) - exogenous variables, growth and expansion, franchising, holding companies, stock investments, contraction, liquidation, working capital vs. long-term finance, ratios for management of working capital, types of financial risk, appropriate level of working capital, components of working capital.
B. Cash Management (11) – cash budgeting, cash balances, lock box systems, concentration banking, electronic funds transfer, automated clearinghouses, drafts, check float, disbursements float, collections float, zero-balance checking account, treasury bills, CDs, money-market accounts, cash flow cycle, relationship between cash and inventory.
C. Marketable Securities (5) – reasons for holding marketable securities, financial risk vs. interest rate risk, liquidity, risk and return factors, agency securities, banker’s acceptances, repurchase agreements, commercial paper.
D. Accounts Receivable Management (4) – level of accounts receivable, accounts receivable turnover ratio, lengthened credit periods, cost of not taking a discount.
E. Inventory Management (17) – inventory models, ordering costs, carrying costs, stock-out costs, economic order quantity, just-in-time, materials requirements planning, safety stock, optimal inventory level, optimal reorder point, cost of placing an order, ABC system, economic production lot size.
F. Short-Term Credit (6) – trade credit, commercial banks, commercial paper, factoring, cost of bank loans, compensating balances, line of credit, prime interest rate, discount rate, sources of short-term funds, short-term borrowing considered unsecured credit, effective interest rate. |
