BA 323

a restrictive short-term financing strategy implies_____

- a small investment in net working capital - possible cash shortages

short-term finance is concerned with current assets and current liabilities, whereas long-term finance is concerned with ____

-capital structure -dividend policy -capital budgeting

sources of cash can involve increasing a(n) ___ account

-equity -liability

uses of cash can involve increasing a(n) ____ account

-fixed asset -non cash current asset

for US corporations, current assets have fallen from 50% of total assets in the 1960's to 40% of total assets today primarily because of more efficient:

-inventory management -cash management

the gap between short term cash inflows and outflows can be filled by

-maintaining a liquidity reserve -borrowing

the gap between short term cash inflows and outflows can be filled by ___

-maintaining a liquidity reserve -borrowing

which activities are primary to short-term finance?

-operating activities -finance activities

examples of cash disbursements

-payments of accounts payable -wages and taxes -capital expenditures

a flexible short-term financing strategy implies surplus cash and little borrowing, but the advantage of such a strategy is:

a reduced probability of financial distress

although flexible short-term financial policies are more costly, they result in ____

a reduced probability of financial distress

the cash cycle is equal to the operating cycle minus the ___ period

accounts payable

the time taken to collect on credit sales is called the ___ period

accounts receivable

the difference between the operating cycle and the accounts payable period is the ____

cash cycle

cash cycle

cash cycle =operating cycle - accounts payable period

commercial paper is an example of a:

debt security

the time it takes to acquire and sell inventory is called the ___ period

inventory

the difference between cash collections and cash disbursements is the predicted____

net cash flow