Working capital management
Free IMA CMA Part 2 (Strategic Financial Management) lesson in Corporate Finance. 10 min read, ~1,482 words.
Working capital = current assets. Net working capital = current assets minus current liabilities. Three cash motives: transaction, precautionary, speculative (speculative funds unplanned opportunities). Lockbox is profitable when float-day interest savings exceed bank fees. Marketable security choice trades off safety, liquidity, yield, maturity, and taxability. Loosening credit terms lifts sales...
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What this lesson covers
- Content
- Example 1
- Example 2
- Common Mistakes
- Check Your Understanding
- Exam Shortcuts
Learning objectives
- 2B4
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