财务管理基础工业出版社13版Chap006_PPT
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• Fixed assets • Permanent current assets • Part of the temporary current assets
1-24
Using Long-Term Financing for Part of Short-Term Needs
1-25
Short- Term Financing
1-9
Seasonal Sales Pattern in Target and Limited Brands
• Like publishers, retail companies do not stock inventory for more then a year • Fourth quarter is the biggest quarter for retailers • As per the figure, the Target is growing much faster than the Limited Brands • Even then, in the fourth quarter, peak earnings are almost equal for both the companies
1-16
Sales Forecasts, Cash Receipts, and Payments, and Cash Budget (cont’d)
• Table 6-3 is created to examine the buildup in accounts receivable and cash
– Lenders and financial managers need to plan inventory – Lack of correct inventory planning can lead to lost sales
1-8
Quarterly Sales and Earnings Per Share for McGraw Hill
• Current assets fluctuate in the short run, depending on:
– Level of production versus the level of sales
• When production is higher than sales the inventory rises • When sales are higher than production, inventory declines and receivables increase
– The challenge of constructing a financial plan is to prioritize the current assets into temporary and permanent – The exact timing of asset liquidation, even in the light of ascertaining dollar amounts is onerous – It is also difficult to judge the amount of shortterm and long-term financing available
1-7
Matching Sales and ProductionMcGraw-Hill Companies, Inc.
• A good example of seasonal sale • Has significant share of sales and earnings in the third and fourth quarters • Due to seasonal nature of textbook publishing
– Matching of asset buildup and length of financing pattern
1-21
Matching Long-Term and ShortTerm Needs
1-22
Alternative Plans
• It is important to consider other alternatives
1-2
பைடு நூலகம்
Working Capital Management
• The financing and management of the current assets of a firm
– Crucial to achieving long-term objectives of the firm or its failure – Requires immediate action
1-6
Controlling Assets – Matching Sales and Production (cont’d)
• Cash budgeting process
– Level production method
• Smooth production schedules • Use of manpower and equipment efficiently to lower cost
1-10
Quarterly Sales and Earnings Per Share, Target and Limited Brands
1-11
Point-of-Sales Terminals
• Retail-oriented firms use new, computerized inventory control systems linked online
1-17
Total Current Assets, First Year ($millions)
1-18
Yawakuzi’s Nature of Asset Growth
1-19
Cash Budget and Assets for II Year With No Growth in Sales ($millions)
– Unexpected buildup. – Reduction in inventory, affecting receivables and cash flow
• Firm’s current assets could be:
– Self-liquidating – ‘Permanent’ current assets.
– Digital inputs or optical scanners
• Helps adjust orders or production schedules
– Radio Frequency Identification (RFID)
1-12
Temporary Assets under Level Production – An Example
1-23
Long-Term Financing
• Firms can be assured of having adequate capital at all times:
– Use long-term capital to cover part of the shortterm needs – Long-term capital can be used to finance:
• Graphic presentation of the current asset cycle.
1-20
Patterns of Financing
• Selection of external sources to fund financial assets is an important decision • The appropriate financing pattern:
1-4
The Nature of Asset Growth (cont’d)
1-5
Controlling Assets – Matching Sales and Production
• Fixed assets grow slowly with:
– Increase in productive capacity – Replacement of old equipment
– Match sales and production as closely as possible in the short run
• Allows current assets to increase or decrease with the level of sales • Eliminates the large seasonal bulges or sharp reductions in current assets
– Sales forecast: Based on assumptions taken earlier (table 6-1) – Cash receipts: 50% cash collected during the month of sale and 50% pertains to the prior month – Cash budget: a comparison of cash receipt and payment schedules to determine cash flow
1-13
Yawakuzi Sales Forecast (in units)
1-14
Yawakuzi’s Production Schedule and Inventory
1-15
Sales Forecasts, Cash Receipts, and Payments, and Cash Budget
6
Chapter
Working Capital and the Financing Decision
McGraw-Hill/Irwin Copyright © 2008 by The McGraw-Hill Companies, Inc. All rights reserved.
Chapter Outline
1-3
The Nature of Asset Growth
• Effective current assets management requires matching of the forecasted sales and production schedules • Differences in actual sales and forecasted sales can result in:
• Small businesses do not have total access to long-term financing
• • • • • • Working capital management Current asset management Asset financing Long-term versus short-term financing Risk and profitability vis-à-vis asset financing Expected value analysis may sometimes be employed
• Yawakuzi Motorcycle Company
– Sales fluctuations: High sales demand during early spring and summer; sales drop during October through March – Decision: Apply level production method - 12month sales forecast is issued – Result: Level production and seasonal sales combine to produce fluctuating inventory
1-24
Using Long-Term Financing for Part of Short-Term Needs
1-25
Short- Term Financing
1-9
Seasonal Sales Pattern in Target and Limited Brands
• Like publishers, retail companies do not stock inventory for more then a year • Fourth quarter is the biggest quarter for retailers • As per the figure, the Target is growing much faster than the Limited Brands • Even then, in the fourth quarter, peak earnings are almost equal for both the companies
1-16
Sales Forecasts, Cash Receipts, and Payments, and Cash Budget (cont’d)
• Table 6-3 is created to examine the buildup in accounts receivable and cash
– Lenders and financial managers need to plan inventory – Lack of correct inventory planning can lead to lost sales
1-8
Quarterly Sales and Earnings Per Share for McGraw Hill
• Current assets fluctuate in the short run, depending on:
– Level of production versus the level of sales
• When production is higher than sales the inventory rises • When sales are higher than production, inventory declines and receivables increase
– The challenge of constructing a financial plan is to prioritize the current assets into temporary and permanent – The exact timing of asset liquidation, even in the light of ascertaining dollar amounts is onerous – It is also difficult to judge the amount of shortterm and long-term financing available
1-7
Matching Sales and ProductionMcGraw-Hill Companies, Inc.
• A good example of seasonal sale • Has significant share of sales and earnings in the third and fourth quarters • Due to seasonal nature of textbook publishing
– Matching of asset buildup and length of financing pattern
1-21
Matching Long-Term and ShortTerm Needs
1-22
Alternative Plans
• It is important to consider other alternatives
1-2
பைடு நூலகம்
Working Capital Management
• The financing and management of the current assets of a firm
– Crucial to achieving long-term objectives of the firm or its failure – Requires immediate action
1-6
Controlling Assets – Matching Sales and Production (cont’d)
• Cash budgeting process
– Level production method
• Smooth production schedules • Use of manpower and equipment efficiently to lower cost
1-10
Quarterly Sales and Earnings Per Share, Target and Limited Brands
1-11
Point-of-Sales Terminals
• Retail-oriented firms use new, computerized inventory control systems linked online
1-17
Total Current Assets, First Year ($millions)
1-18
Yawakuzi’s Nature of Asset Growth
1-19
Cash Budget and Assets for II Year With No Growth in Sales ($millions)
– Unexpected buildup. – Reduction in inventory, affecting receivables and cash flow
• Firm’s current assets could be:
– Self-liquidating – ‘Permanent’ current assets.
– Digital inputs or optical scanners
• Helps adjust orders or production schedules
– Radio Frequency Identification (RFID)
1-12
Temporary Assets under Level Production – An Example
1-23
Long-Term Financing
• Firms can be assured of having adequate capital at all times:
– Use long-term capital to cover part of the shortterm needs – Long-term capital can be used to finance:
• Graphic presentation of the current asset cycle.
1-20
Patterns of Financing
• Selection of external sources to fund financial assets is an important decision • The appropriate financing pattern:
1-4
The Nature of Asset Growth (cont’d)
1-5
Controlling Assets – Matching Sales and Production
• Fixed assets grow slowly with:
– Increase in productive capacity – Replacement of old equipment
– Match sales and production as closely as possible in the short run
• Allows current assets to increase or decrease with the level of sales • Eliminates the large seasonal bulges or sharp reductions in current assets
– Sales forecast: Based on assumptions taken earlier (table 6-1) – Cash receipts: 50% cash collected during the month of sale and 50% pertains to the prior month – Cash budget: a comparison of cash receipt and payment schedules to determine cash flow
1-13
Yawakuzi Sales Forecast (in units)
1-14
Yawakuzi’s Production Schedule and Inventory
1-15
Sales Forecasts, Cash Receipts, and Payments, and Cash Budget
6
Chapter
Working Capital and the Financing Decision
McGraw-Hill/Irwin Copyright © 2008 by The McGraw-Hill Companies, Inc. All rights reserved.
Chapter Outline
1-3
The Nature of Asset Growth
• Effective current assets management requires matching of the forecasted sales and production schedules • Differences in actual sales and forecasted sales can result in:
• Small businesses do not have total access to long-term financing
• • • • • • Working capital management Current asset management Asset financing Long-term versus short-term financing Risk and profitability vis-à-vis asset financing Expected value analysis may sometimes be employed
• Yawakuzi Motorcycle Company
– Sales fluctuations: High sales demand during early spring and summer; sales drop during October through March – Decision: Apply level production method - 12month sales forecast is issued – Result: Level production and seasonal sales combine to produce fluctuating inventory