Working capital decisions in Financial management Dr Naim R Kidwai
This presentation covers the topics of working capital decisions.It covers types of working capital, determinants of working capital, cash management, inventory control and account recievables
Introduction
Working capital typically means the firm’s holding of current or short-term assets such as cash, receivables, inventory and marketable securities.
These items are also referred to as circulating capital
Corporate executives devote a considerable amount of attention to the management of working capital
Definition
Working Capital refers to that part of the firm’s capital, which is required for financing short-term or current assets such a cash marketable securities, debtors and inventories. Funds thus, invested in current assets keep revolving fast and are constantly converted into cash and this cash flow out again in exchange for other current assets. Working Capital is also known as revolving or circulating capital or short-term capital.
Nature Of Working Capital
Working capital management is concerned with the problems that arise in attempting to manage the current assets, the current liabilities and the interrelations that exist between them.
Current assets refer to those assets which in the ordinary course of business can be, or will be, converted into cash within one year without undergoing a diminution in value and without disrupting the operations of the firm.
Examples- cash, marketable securities, accounts receivable and inventory.
Current liabilities are those liabilities which are intended, at their inception, to be paid in the ordinary course of business, within a year, out of the current assets or the earnings of the concern.
Examples- accounts payable, bills payable, bank overdraft and outstanding expenses.
Practice of working capital management a case study on gdicMirza Tanzida
This project work reflects the combination of my knowledge with the practical experience on working at GDIC as an intern. Hopefully, it will help the reader to learn about the working capital policies and practice.
Working capital decisions in Financial management Dr Naim R Kidwai
This presentation covers the topics of working capital decisions.It covers types of working capital, determinants of working capital, cash management, inventory control and account recievables
Introduction
Working capital typically means the firm’s holding of current or short-term assets such as cash, receivables, inventory and marketable securities.
These items are also referred to as circulating capital
Corporate executives devote a considerable amount of attention to the management of working capital
Definition
Working Capital refers to that part of the firm’s capital, which is required for financing short-term or current assets such a cash marketable securities, debtors and inventories. Funds thus, invested in current assets keep revolving fast and are constantly converted into cash and this cash flow out again in exchange for other current assets. Working Capital is also known as revolving or circulating capital or short-term capital.
Nature Of Working Capital
Working capital management is concerned with the problems that arise in attempting to manage the current assets, the current liabilities and the interrelations that exist between them.
Current assets refer to those assets which in the ordinary course of business can be, or will be, converted into cash within one year without undergoing a diminution in value and without disrupting the operations of the firm.
Examples- cash, marketable securities, accounts receivable and inventory.
Current liabilities are those liabilities which are intended, at their inception, to be paid in the ordinary course of business, within a year, out of the current assets or the earnings of the concern.
Examples- accounts payable, bills payable, bank overdraft and outstanding expenses.
Practice of working capital management a case study on gdicMirza Tanzida
This project work reflects the combination of my knowledge with the practical experience on working at GDIC as an intern. Hopefully, it will help the reader to learn about the working capital policies and practice.
it is useful for MBA 2nd semister students. they didn't know the proper information about the working capital management. so , that's why i prepare the some introduction part for this concept.
it is useful for MBA 2nd semister students. they didn't know the proper information about the working capital management. so , that's why i prepare the some introduction part for this concept.
Managing balance sheet liquidity & long term funding Dr Rajeev Jain
Managing balance sheet liquidity and long term funding
• Do the company have the right cash management processes?
• The importance of accurately forecast company cash flow with liquidity management
• Looking at your balance sheet frequently: Do the company has sufficient funding sources?
• Ensuring the right balance of credit and non-credit service utilisation for funding process
• Learning about rebuilding the balance sheet and turning their problem into growth
• Establishing long term stability and security of our funding in turn helps protect our liquidity position in the crisis
• Building necessary tools and methods to achieve properly structured balance sheet
• Managing complex situations precisely through flexible values (general direction), values with longer lifespan than goals or objectives and past and present corporate actions
What price will pi network be listed on exchangesDOT TECH
The rate at which pi will be listed is practically unknown. But due to speculations surrounding it the predicted rate is tends to be from 30$ — 50$.
So if you are interested in selling your pi network coins at a high rate tho. Or you can't wait till the mainnet launch in 2026. You can easily trade your pi coins with a merchant.
A merchant is someone who buys pi coins from miners and resell them to Investors looking forward to hold massive quantities till mainnet launch.
I will leave the telegram contact of my personal pi vendor to trade with.
@Pi_vendor_247
Empowering the Unbanked: The Vital Role of NBFCs in Promoting Financial Inclu...Vighnesh Shashtri
In India, financial inclusion remains a critical challenge, with a significant portion of the population still unbanked. Non-Banking Financial Companies (NBFCs) have emerged as key players in bridging this gap by providing financial services to those often overlooked by traditional banking institutions. This article delves into how NBFCs are fostering financial inclusion and empowering the unbanked.
what is the future of Pi Network currency.DOT TECH
The future of the Pi cryptocurrency is uncertain, and its success will depend on several factors. Pi is a relatively new cryptocurrency that aims to be user-friendly and accessible to a wide audience. Here are a few key considerations for its future:
Message: @Pi_vendor_247 on telegram if u want to sell PI COINS.
1. Mainnet Launch: As of my last knowledge update in January 2022, Pi was still in the testnet phase. Its success will depend on a successful transition to a mainnet, where actual transactions can take place.
2. User Adoption: Pi's success will be closely tied to user adoption. The more users who join the network and actively participate, the stronger the ecosystem can become.
3. Utility and Use Cases: For a cryptocurrency to thrive, it must offer utility and practical use cases. The Pi team has talked about various applications, including peer-to-peer transactions, smart contracts, and more. The development and implementation of these features will be essential.
4. Regulatory Environment: The regulatory environment for cryptocurrencies is evolving globally. How Pi navigates and complies with regulations in various jurisdictions will significantly impact its future.
5. Technology Development: The Pi network must continue to develop and improve its technology, security, and scalability to compete with established cryptocurrencies.
6. Community Engagement: The Pi community plays a critical role in its future. Engaged users can help build trust and grow the network.
7. Monetization and Sustainability: The Pi team's monetization strategy, such as fees, partnerships, or other revenue sources, will affect its long-term sustainability.
It's essential to approach Pi or any new cryptocurrency with caution and conduct due diligence. Cryptocurrency investments involve risks, and potential rewards can be uncertain. The success and future of Pi will depend on the collective efforts of its team, community, and the broader cryptocurrency market dynamics. It's advisable to stay updated on Pi's development and follow any updates from the official Pi Network website or announcements from the team.
What website can I sell pi coins securely.DOT TECH
Currently there are no website or exchange that allow buying or selling of pi coins..
But you can still easily sell pi coins, by reselling it to exchanges/crypto whales interested in holding thousands of pi coins before the mainnet launch.
Who is a pi merchant?
A pi merchant is someone who buys pi coins from miners and resell to these crypto whales and holders of pi..
This is because pi network is not doing any pre-sale. The only way exchanges can get pi is by buying from miners and pi merchants stands in between the miners and the exchanges.
How can I sell my pi coins?
Selling pi coins is really easy, but first you need to migrate to mainnet wallet before you can do that. I will leave the telegram contact of my personal pi merchant to trade with.
Tele-gram.
@Pi_vendor_247
how to sell pi coins on Bitmart crypto exchangeDOT TECH
Yes. Pi network coins can be exchanged but not on bitmart exchange. Because pi network is still in the enclosed mainnet. The only way pioneers are able to trade pi coins is by reselling the pi coins to pi verified merchants.
A verified merchant is someone who buys pi network coins and resell it to exchanges looking forward to hold till mainnet launch.
I will leave the telegram contact of my personal pi merchant to trade with.
@Pi_vendor_247
USDA Loans in California: A Comprehensive Overview.pptxmarketing367770
USDA Loans in California: A Comprehensive Overview
If you're dreaming of owning a home in California's rural or suburban areas, a USDA loan might be the perfect solution. The U.S. Department of Agriculture (USDA) offers these loans to help low-to-moderate-income individuals and families achieve homeownership.
Key Features of USDA Loans:
Zero Down Payment: USDA loans require no down payment, making homeownership more accessible.
Competitive Interest Rates: These loans often come with lower interest rates compared to conventional loans.
Flexible Credit Requirements: USDA loans have more lenient credit score requirements, helping those with less-than-perfect credit.
Guaranteed Loan Program: The USDA guarantees a portion of the loan, reducing risk for lenders and expanding borrowing options.
Eligibility Criteria:
Location: The property must be located in a USDA-designated rural or suburban area. Many areas in California qualify.
Income Limits: Applicants must meet income guidelines, which vary by region and household size.
Primary Residence: The home must be used as the borrower's primary residence.
Application Process:
Find a USDA-Approved Lender: Not all lenders offer USDA loans, so it's essential to choose one approved by the USDA.
Pre-Qualification: Determine your eligibility and the amount you can borrow.
Property Search: Look for properties in eligible rural or suburban areas.
Loan Application: Submit your application, including financial and personal information.
Processing and Approval: The lender and USDA will review your application. If approved, you can proceed to closing.
USDA loans are an excellent option for those looking to buy a home in California's rural and suburban areas. With no down payment and flexible requirements, these loans make homeownership more attainable for many families. Explore your eligibility today and take the first step toward owning your dream home.
how can I sell my pi coins for cash in a pi APPDOT TECH
You can't sell your pi coins in the pi network app. because it is not listed yet on any exchange.
The only way you can sell is by trading your pi coins with an investor (a person looking forward to hold massive amounts of pi coins before mainnet launch) .
You don't need to meet the investor directly all the trades are done with a pi vendor/merchant (a person that buys the pi coins from miners and resell it to investors)
I Will leave The telegram contact of my personal pi vendor, if you are finding a legitimate one.
@Pi_vendor_247
#pi network
#pi coins
#money
Resume
• Real GDP growth slowed down due to problems with access to electricity caused by the destruction of manoeuvrable electricity generation by Russian drones and missiles.
• Exports and imports continued growing due to better logistics through the Ukrainian sea corridor and road. Polish farmers and drivers stopped blocking borders at the end of April.
• In April, both the Tax and Customs Services over-executed the revenue plan. Moreover, the NBU transferred twice the planned profit to the budget.
• The European side approved the Ukraine Plan, which the government adopted to determine indicators for the Ukraine Facility. That approval will allow Ukraine to receive a EUR 1.9 bn loan from the EU in May. At the same time, the EU provided Ukraine with a EUR 1.5 bn loan in April, as the government fulfilled five indicators under the Ukraine Plan.
• The USA has finally approved an aid package for Ukraine, which includes USD 7.8 bn of budget support; however, the conditions and timing of the assistance are still unknown.
• As in March, annual consumer inflation amounted to 3.2% yoy in April.
• At the April monetary policy meeting, the NBU again reduced the key policy rate from 14.5% to 13.5% per annum.
• Over the past four weeks, the hryvnia exchange rate has stabilized in the UAH 39-40 per USD range.
what is the best method to sell pi coins in 2024DOT TECH
The best way to sell your pi coins safely is trading with an exchange..but since pi is not launched in any exchange, and second option is through a VERIFIED pi merchant.
Who is a pi merchant?
A pi merchant is someone who buys pi coins from miners and pioneers and resell them to Investors looking forward to hold massive amounts before mainnet launch in 2026.
I will leave the telegram contact of my personal pi merchant to trade pi coins with.
@Pi_vendor_247
Latino Buying Power - May 2024 Presentation for Latino CaucusDanay Escanaverino
Unlock the potential of Latino Buying Power with this in-depth SlideShare presentation. Explore how the Latino consumer market is transforming the American economy, driven by their significant buying power, entrepreneurial contributions, and growing influence across various sectors.
**Key Sections Covered:**
1. **Economic Impact:** Understand the profound economic impact of Latino consumers on the U.S. economy. Discover how their increasing purchasing power is fueling growth in key industries and contributing to national economic prosperity.
2. **Buying Power:** Dive into detailed analyses of Latino buying power, including its growth trends, key drivers, and projections for the future. Learn how this influential group’s spending habits are shaping market dynamics and creating opportunities for businesses.
3. **Entrepreneurial Contributions:** Explore the entrepreneurial spirit within the Latino community. Examine how Latino-owned businesses are thriving and contributing to job creation, innovation, and economic diversification.
4. **Workforce Statistics:** Gain insights into the role of Latino workers in the American labor market. Review statistics on employment rates, occupational distribution, and the economic contributions of Latino professionals across various industries.
5. **Media Consumption:** Understand the media consumption habits of Latino audiences. Discover their preferences for digital platforms, television, radio, and social media. Learn how these consumption patterns are influencing advertising strategies and media content.
6. **Education:** Examine the educational achievements and challenges within the Latino community. Review statistics on enrollment, graduation rates, and fields of study. Understand the implications of education on economic mobility and workforce readiness.
7. **Home Ownership:** Explore trends in Latino home ownership. Understand the factors driving home buying decisions, the challenges faced by Latino homeowners, and the impact of home ownership on community stability and economic growth.
This SlideShare provides valuable insights for marketers, business owners, policymakers, and anyone interested in the economic influence of the Latino community. By understanding the various facets of Latino buying power, you can effectively engage with this dynamic and growing market segment.
Equip yourself with the knowledge to leverage Latino buying power, tap into their entrepreneurial spirit, and connect with their unique cultural and consumer preferences. Drive your business success by embracing the economic potential of Latino consumers.
**Keywords:** Latino buying power, economic impact, entrepreneurial contributions, workforce statistics, media consumption, education, home ownership, Latino market, Hispanic buying power, Latino purchasing power.
The European Unemployment Puzzle: implications from population agingGRAPE
We study the link between the evolving age structure of the working population and unemployment. We build a large new Keynesian OLG model with a realistic age structure, labor market frictions, sticky prices, and aggregate shocks. Once calibrated to the European economy, we quantify the extent to which demographic changes over the last three decades have contributed to the decline of the unemployment rate. Our findings yield important implications for the future evolution of unemployment given the anticipated further aging of the working population in Europe. We also quantify the implications for optimal monetary policy: lowering inflation volatility becomes less costly in terms of GDP and unemployment volatility, which hints that optimal monetary policy may be more hawkish in an aging society. Finally, our results also propose a partial reversal of the European-US unemployment puzzle due to the fact that the share of young workers is expected to remain robust in the US.
2. 2
After studying Chapter 8,After studying Chapter 8,
you should be able to:you should be able to:
Explain how the definition of "working capital" differs between
financial analysts and accountants.
Understand the two fundamental decision issues in working
capital management -- and the trade-offs involved in making
these decisions.
Discuss how to determine the optimal level of current assets.
Describe the relationship between profitability, liquidity, and risk
in the management of working capital.
Explain how to classify working capital according to its
“components” and according to “time” (i.e., either permanent or
temporary).
Describe the hedging (maturity matching) approach to financing
and the advantages/disadvantages of short- versus long-term
financing.
Explain how the financial manager combines the current asset
decision with the liability structure decision.
3. 3
Overview of WorkingOverview of Working
Capital ManagementCapital Management
Working Capital Concepts
Working Capital Issues
Financing Current Assets:
Short-Term and Long-Term Mix
Combining Liability Structure
and Current Asset Decisions
4. 4
Working Capital ConceptsWorking Capital Concepts
Net Working CapitalNet Working Capital
Current Assets - Current Liabilities.
Gross Working CapitalGross Working Capital
The firm’s investment in current assets.
Working Capital ManagementWorking Capital Management
The administration of the firm’s current assets and
the financing needed to support current assets.
5. 5
Significance of WorkingSignificance of Working
Capital ManagementCapital Management
In a typical manufacturing firm, current
assets exceed one-half of total assets.
Excessive levels can result in a substandard
Return on Investment (ROI).
Current liabilities are the principal source of
external financing for small firms.
Requires continuous, day-to-day managerial
supervision.
Working capital management affects the
company’s risk, return, and share price.
6. 6
Working Capital IssuesWorking Capital Issues
Assumptions
50,000 maximum
units of production
Continuous
production
Three different
policies for current
asset levels are
possible
Optimal Amount (Level) of Current Assets
0 25,000 50,000
OUTPUT (units)
ASSETLEVEL($)
Current Assets
Policy CPolicy C
Policy APolicy A
Policy BPolicy B
7. 7
Impact on LiquidityImpact on Liquidity
Liquidity Analysis
PolicyPolicy LiquidityLiquidity
AA HighHigh
BB AverageAverage
CC LowLow
Greater current asset
levels generate more
liquidity; all other
factors held constant.
Optimal Amount (Level) of Current Assets
0 25,000 50,000
OUTPUT (units)
ASSETLEVEL($)
Current Assets
Policy CPolicy C
Policy APolicy A
Policy BPolicy B
8. 8
Impact onImpact on
Expected ProfitabilityExpected Profitability
Return on InvestmentReturn on Investment =
Net ProfitNet Profit
Total AssetsTotal Assets
Let Current AssetsCurrent Assets =
(Cash + Rec. + Inv.)
Return on InvestmentReturn on Investment =
Net ProfitNet Profit
CurrentCurrent + Fixed AssetsFixed Assets
Optimal Amount (Level) of Current Assets
0 25,000 50,000
OUTPUT (units)
ASSETLEVEL($)
Current Assets
Policy CPolicy C
Policy APolicy A
Policy BPolicy B
9. 9
Impact onImpact on
Expected ProfitabilityExpected Profitability
Profitability Analysis
PolicyPolicy ProfitabilityProfitability
AA LowLow
BB AverageAverage
CC HighHigh
As current asset levels
decline, total assets will
decline and the ROI will
rise.
Optimal Amount (Level) of Current Assets
0 25,000 50,000
OUTPUT (units)
ASSETLEVEL($)
Current Assets
Policy CPolicy C
Policy APolicy A
Policy BPolicy B
10. 10
Impact on RiskImpact on Risk
Decreasing cash
reduces the firm’s ability
to meet its financial
obligations. More risk!More risk!
Stricter credit policies
reduce receivables and
possibly lose sales and
customers. More risk!More risk!
Lower inventory levels
increase stockouts and
lost sales. More risk!More risk!
Optimal Amount (Level) of Current Assets
0 25,000 50,000
OUTPUT (units)
ASSETLEVEL($)
Current Assets
Policy CPolicy C
Policy APolicy A
Policy BPolicy B
11. 11
Impact on RiskImpact on Risk
Risk Analysis
PolicyPolicy RiskRisk
AA LowLow
BB AverageAverage
CC HighHigh
Risk increases as the
level of current assets
are reduced.
Optimal Amount (Level) of Current Assets
0 25,000 50,000
OUTPUT (units)
ASSETLEVEL($)
Current Assets
Policy CPolicy C
Policy APolicy A
Policy BPolicy B
12. 12
Summary of the OptimalSummary of the Optimal
Amount of Current AssetsAmount of Current Assets
SSUMMARYUMMARY OOFF OOPTIMALPTIMAL CCURRENTURRENT AASSETSSET AANALYSISNALYSIS
PolicyPolicy LiquidityLiquidity ProfitabilityProfitability RiskRisk
AA HighHigh LowLow LowLow
BB AverageAverage AverageAverage AverageAverage
CC LowLow HighHigh HighHigh
1. Profitability varies inversely with
liquidity.
2. Profitability moves together with risk.
(risk and return go hand in hand!)
14. 14
PermanentPermanent
Working CapitalWorking Capital
The amount of current assets required toThe amount of current assets required to
meet a firm’s long-term minimum needs.meet a firm’s long-term minimum needs.
Permanent current assetsPermanent current assets
TIME
DOLLARAMOUNT
15. 15
TemporaryTemporary
Working CapitalWorking Capital
The amount of current assets that variesThe amount of current assets that varies
with seasonal requirements.with seasonal requirements.
Permanent current assetsPermanent current assets
TIME
DOLLARAMOUNT
Temporary current assetsTemporary current assets
16. 16
Financing Current Assets:Financing Current Assets:
Short-Term and Long-Term MixShort-Term and Long-Term Mix
Spontaneous FinancingSpontaneous Financing:: Trade credit, and
other payables and accruals, that arise
spontaneously in the firm’s day-to-day
operations.
Based on policies regarding payment for
purchases, labor, taxes, and other expenses.
We are concerned with managing non-
spontaneous financing of assets.
17. 17
Hedging (or MaturityHedging (or Maturity
Matching) ApproachMatching) Approach
A method of financing where each asset would be offset withA method of financing where each asset would be offset with
a financing instrument of the same approximate maturity.a financing instrument of the same approximate maturity.
TIME
DOLLARAMOUNT
Long-term financing
Fixed assetsFixed assets
Current assets*Current assets*
Short-term financing**
18. 18
Hedging (or MaturityHedging (or Maturity
Matching) ApproachMatching) Approach
** Less amount financed spontaneously by payables and accruals.
**** In addition to spontaneous financing (payables and accruals).
TIME
DOLLARAMOUNT
Long-term financing
Fixed assetsFixed assets
Current assets*Current assets*
Short-term financing**
19. 19
Financing Needs andFinancing Needs and
the Hedging Approachthe Hedging Approach
Fixed assets and the non-seasonal portion
of current assets are financed with long-
term debt and equity (long-term profitability
of assets to cover the long-term financing
costs of the firm).
Seasonal needs are financed with short-
term loans (under normal operations
sufficient cash flow is expected to cover the
short-term financing cost).
20. 20
Self-Liquidating NatureSelf-Liquidating Nature
of Short-Term Loansof Short-Term Loans
Seasonal orders require the purchase of
inventory beyond current levels.
Increased inventory is used to meet the
increased demand for the final product.
Sales become receivables.
Receivables are collected and become cash.
The resulting cash funds can be used to pay
off the seasonal short-term loan and cover
associated long-term financing costs.
21. 21
Risks vs. Costs Trade-OffRisks vs. Costs Trade-Off
(Conservative Approach)(Conservative Approach)
Long-Term Financing BenefitsLong-Term Financing Benefits
Less worry in refinancing short-term obligations
Less uncertainty regarding future interest costs
Long-Term Financing RisksLong-Term Financing Risks
Borrowing more than what is necessary
Borrowing at a higher overall cost (usually)
ResultResult
Manager accepts less expected profits in
exchange for taking less risk.
22. 22
Risks vs. Costs Trade-OffRisks vs. Costs Trade-Off
(Conservative Approach)(Conservative Approach)
Firm can reduce risks associated with short-term borrowingFirm can reduce risks associated with short-term borrowing
by using a larger proportion of long-term financing.by using a larger proportion of long-term financing.
TIME
DOLLARAMOUNT
Long-term financing
Fixed assetsFixed assets
Current assetsCurrent assets
Short-term financingShort-term financing
23. 23
Comparison with anComparison with an
Aggressive ApproachAggressive Approach
Short-Term Financing BenefitsShort-Term Financing Benefits
Financing long-term needs with a lower interest
cost than short-term debt
Borrowing only what is necessary
Short-Term Financing RisksShort-Term Financing Risks
Refinancing short-term obligations in the future
Uncertain future interest costs
ResultResult
Manager accepts greater expected profits in
exchange for taking greater risk.
24. 24
Firm increases risks associated with short-term borrowing byFirm increases risks associated with short-term borrowing by
using a larger proportion of short-term financing.using a larger proportion of short-term financing.
TIME
DOLLARAMOUNT
Long-term financing
Fixed assetsFixed assets
Current assetsCurrent assets
Short-term financing
Risks vs. Costs Trade-OffRisks vs. Costs Trade-Off
(Aggressive Approach)(Aggressive Approach)
25. 25
Summary of Short- vs.Summary of Short- vs.
Long-Term FinancingLong-Term Financing
Financing
Maturity
Asset
Maturity
SHORT-TERM LONG-TERM
Low
Risk-Profitability
Moderate
Risk-Profitability
Moderate
Risk-Profitability
High
Risk-Profitability
SHORT-TERM
(TemporaryTemporary)
LONG-TERM
(PermanentPermanent)
26. 26
Combining Liability StructureCombining Liability Structure
and Current Asset Decisionsand Current Asset Decisions
The level of current assetslevel of current assets and the
method of financing those assetsmethod of financing those assets are
interdependentinterdependent.
A conservative policyconservative policy of “high” levels of
current assets allows a more aggressiveaggressive
method of financing current assets.
A conservativeconservative method of financing
(all-equity) allows an aggressive policyaggressive policy
of “low” levels of current assets.