財(cái)務(wù)管理基礎(chǔ)課件：Working Capital and the Financing Decision

WorkingCapitalandtheFinancingDecision

6-2ChapterOutlineWorkingcapitalmanagementCurrentassets-temporaryandpermanentAssetsfinancingLong-termversusshort-termfinancingCurrentassetsfinancingplan-riskandprofitabilityExpectedvalueanalysisinworkingcapitalmanagement6-3WorkingCapitalManagementThefinancingandmanagementofthecurrentassetsofafirmCrucialtoachievinglong-termobjectivesofthefirmRequiresimmediateaction6-4TheNatureofAssetGrowthKeytocurrentassetplanning–matchingproductionscheduleswithaccuratesalesforecastDifferencesinactualsalesandforecastedsalescanresultin:Unexpectedbuildup.Reductionininventory,affectingreceivablesandcashflowFirm’scurrentassetscouldbe:Self-liquidating‘Permanent’currentassets.6-5TheNatureofAssetGrowth6-6ControllingAssets–MatchingSalesandProductionFixedassetsgrowslowlywith:IncreaseinproductivecapacityReplacementofoldequipmentCurrentassetsfluctuateintheshortrun,dependingon:LevelofproductionversusthelevelofsalesWhenproductionishigherthansalestheinventoryrisesWhensalesarehigherthanproduction,inventorydeclinesandreceivablesincrease6-7ControllingAssets–MatchingSalesandProduction(cont’d)CashbudgetingprocessLevelproductionmethodSmoothproductionschedulesUseofmanpowerandequipmentefficientlytolowercostMatchsalesandproductionascloselyaspossibleintheshortrunAllowscurrentassetstoincreaseordecreasewiththelevelofsalesEliminatesthelargeseasonalbulgesorsharpreductionsincurrentassets6-8MatchingSalesandProduction-McGraw-HillCompanies,Inc.AgoodexampleofseasonalsaleHassignificantshareofsalesandearningsinthethirdandfourthquartersDuetoseasonalnatureoftextbookpublishingLendersandfinancialmanagersneedtoplaninventoryLackofcorrectinventoryplanningcanleadtolostsales6-9TheNatureofAssetGrowth.6-10SeasonalSalesPatterninTargetandLimitedBrandsLikepublishers,retailcompaniesdonotstockinventoryformorethanayearFourthquarteristhebiggestquarterforretailersTheretailfirmTargetisgrowingmuchfasterthanitscounterpartLimitedBrandsEventhen,inthefourthquarter,peakearningsarealmostequalforboththecompanies6-11QuarterlySalesandEarningsPerShare,TargetandLimitedBrands6-12ComputerizedInventoryControlSystemsRetail-orientedfirmsusenew,computerizedinventorycontrolsystemslinkedtoonlinepoint-of-salesterminalsAlloweitherdigitalinputoruseofopticalscannerstorecordtheinventorycodenumbersandtheamountofeachitemsold.UseofRadioFrequencyIdentification(RFID)chipsisthelatestrageininventory/supplychainmanagement6-13TemporaryAssetsunderLevelProduction–AnExampleYawakuziMotorcycleCompanySalesfluctuations:Highsalesdemandduringearlyspringandsummer;salesdropduringOctoberthroughMarchDecision:Applylevelproductionmethod-12-monthsalesforecastisissuedResult:Levelproductionandseasonalsalescombinetoproducefluctuatinginventory6-14YawakuziSalesForecast(inunits)Table-1Table6-16-15Yawakuzi’sProductionScheduleandInventoryTable6-26-16SalesForecasts,CashReceiptsandPayments,andCashBudgetTable6-36-17SalesForecasts,CashReceiptsandPayments,andCashBudget(cont’d)Table6-3iscreatedtoexaminethebuildupinaccountsreceivableandcashSalesforecast:Basedonassumptionstakenearlier(table6-1)Cashreceipts:50%cashcollectedduringthemonthofsaleand50%pertainstothepriormonthCashpayments:Basedonassumptionsoflevelofproductionandcostperunitpluspaymentsforoverhead,dividends,interest,andtaxesCashbudget:acomparisonofcashreceiptandpaymentschedulestodeterminecashflow6-18TotalCurrentAssets,FirstYear

($millions)6-19CashBudgetandAssetsforIIYearWithNoGrowthinSales($millions)6-20Yawakuzi’sNatureofAssetGrowthGraphicpresentationofthecurrentassetcycleassuminglevelofproductionandnosalesgrowth6-21PatternsofFinancingSelectionofexternalsourcestofinanceassetsisanimportantdecisionTheappropriatefinancingpattern:Matchingofassetbuildupandlengthoffinancingterms6-22MatchingLong-TermandShort-TermNeeds6-23AlternativePlansThechallengeofconstructingafinancialplanistocategorizethecurrentassetsintotemporaryandpermanentPredictingtheexacttimingofassetliquidationisadifficulttaskItisalsodifficulttodeterminetheamountofshort-termandlong-termfinancingavailable6-24Long-TermFinancingCanassureadequatecapitalatalltimesMaybeusedtocoverpartoftheshort-termneedsintightmoneyperiodsCanbeusedtofinance:FixedassetsPermanentcurrentassetsPartofthetemporarycurrentassets6-25UsingLong-TermFinancingforPartofShort-TermNeeds6-26Short-TermFinancingSmallbusinessesdonothavetotalaccesstolong-termfinancingTheyrelyonshort-termbankandtradecreditAdvantage:interestratesarelowerShort-termfinancesareusedtofinance:TemporarycurrentassetsPartofthepermanentworkingcapitalneeds6-27UsingShort-TermFinancingforPartofLong-TermNeeds6-28TermStructureofInterestRatesAyieldcurve–thatshowstherelativelevelofshort-termandlong-terminterestratesU.S.governmentsecuritiesarepopularastheyarefreeofdefaultrisksCorporatedebtsecuritiesentailahigherinterestrateduetomorefinancialrisksYieldcurvesforbothsecuritieschangedailytoreflect:CurrentcompetitiveconditionsExpectedinflationChangesineconomicconditions6-29BasicTheories-YieldCurve

LiquiditypremiumtheoryLong-termratesshouldbehigherthanshort-termratesMarketsegmentationtheoryTreasurysecuritiesaredividedintomarketsegmentsbythevariousfinancialinstitutionsinvestinginthemarketExpectationshypothesisYieldsonlong-termsecuritiesisafunctionofshort-termrates6-30Long-andShort-TermAnnualInterestRatesRelativevolatilityandthehistoricallevelofshort-termandlong-termrates6-31AlternativeFinancingPlansADecisionProcess:Comparingalternativefinancingplansforworkingcapital6-32ImpactofFinancingPlansonEarnings6-33VaryingConditionanditsImpactTightmoneyperiodsCapitalisscarcemakingshort-termfinancingdifficulttofindormayensueveryhighratesInadequatefinancingmaymeanlossofsalesorfinancialembarrassment6-34ExpectedReturnsunderDifferentEconomicConditionsExpectedvaluerepresentsthesumoftheexpectedoutcomesunderbothconditions6-35ExpectedReturnsforHighRiskFirms6-36ShiftsinAssetStructureDuringrecession–SalesdeclineorstayevenCash,receivables,andinventoryfall