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12 Cards in this Set
- Front
- Back
- 3rd side (hint)
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Working Capital Management |
Manage each of the firms current assets and liabilities |
Accounts, inventory |
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Networking Capital |
The difference between the firms current assets and current liabilities |
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Profitability |
Relationship between revenues and cost generated by using the firms assets in productive activities |
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Insolvent |
Firm that is unable to pay its Bill's as they come due |
Difficult, insoluble |
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Why does ratio increase but profitability decrease? |
Current assets are less profitable than fixed assets. Fixed assets are more profitable |
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CCC Cash conversion cycle |
Length of time required for a company to convert cash invested in its operations to cash received |
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Operating Cycle |
Time from beginning of the production process to collection of cash from the sale of the finished product |
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OC = AAI + ACP |
Operating cycle = age of inventory + average collection period |
Whirlpool funding |
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Permanent funding requirements |
A constant investment in operating assets resulting from constant sales over time |
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Seasonal funding requirement |
An investment in operating assets that varies over time as a result of cyclic sales |
Carvel ice cream |
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Aggressive funding strategy |
A funding strategy under which the firm funds its seasonal requirements with short term debt |
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Conservative funding strategy |
The firm finds both seasonal and its permanent requirements with long term debt |
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