FIN 466 - Working Capital Management

• Understand a firm’s short-term financing alternatives and the various strategies it can use to fund its current and long-term assets.
• Calculate various liquidity and solvency measures. They will be able to illustrate situations where a “profitable” firm can go bankrupt.
• Understand the various inventory models that deal with the timing and amount of raw material inventory purchases. They will be able to calculate the “optimal” inventory and order quantity. They will also be aware of various accounting systems used to monitor inventory balances.
• Evaluate a credit request and understand how various accounting systems and measurement techniques are used to monitor receivables balances. Students will also know how delinquent accounts should be handled and what alternatives a firm possesses to pursue past due accounts.
• Understand how firms can make the decision to take a cash discount and will be able to calculate the optimal payment timing. Students will also understand how controlled disbursement and zero balance accounts can be used to lengthen the firm’s disbursement float.
• Explain the positive and negative impacts of bank deregulation on the management of all the current accounts.
• Calculate short-term, intermediate-term and long-term forecasts. Additionally, they will be able to determine financing needs based on their forecasts.
• Evaluate the effectiveness of a lockbox and concentration banking system in reducing a firm’s collection float. Students will also understand the various financial models used to make the cash and securities allocation decision. Students will also be aware of the characteristics of the major short-term marketable securities.
• Perform all calculations using spreadsheet cell formulas and built in functions. Students will also be able to create various types of graphs.