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Working Capital Management: Rights Reserved

The document discusses techniques for managing working capital including managing cash, receivables, and inventory. It outlines topics like cash management, collection and disbursement, credit and receivables policies, inventory types and management systems, and determining optimal inventory levels.

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Damian Deo
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5 views2 pages

Working Capital Management: Rights Reserved

The document discusses techniques for managing working capital including managing cash, receivables, and inventory. It outlines topics like cash management, collection and disbursement, credit and receivables policies, inventory types and management systems, and determining optimal inventory levels.

Uploaded by

Damian Deo
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

1

Copyright © 2008 by The McGraw-Hill Companies, I McGraw-Hill/Irwin nc. All


rights reserved.

Chapter 17
Working Capital
Management

1-217-2

Key Concepts and Skills

• Understand how firms manage cash and

various collection, concentration, and

disbursement techniques

• Understand how to manage receivables,

and the basic components of credit

policy

• Understand various inventory types,

different inventory management


systems, and what determines the

optimal inventory level

1-317-3

Chapter Outline

• Float and Cash Management

• Cash Management: Collection,

Disbursement, and Investment

• Credit and Receivables

• Inventory Management

• Inventory Management Techniques

1-417-4

Reasons for Holding Cash

• Speculative motive – hold cash to take

advantage of unexpected opportunities

• Precautionary motive – hold cash in case of

emergencies

• Transaction motive – hold cash to pay the dayto-

day bills

• Trade-off between opportunity cost of holding

cash relative to the transaction cost of

converting marketable securities to cash for

transactions

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