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