Problem
A. How different amounts of current assets and current liabilities affect the profitability and stock prices of the firmm?
B. How the cash conversion cycle is determined and how it is used in capital management?
C. How the cash budget is constructed, and how it is used in working capital management?
D. Explain how companies decide on the proper amount of each current asset-cash, marketable securities, accounts receivable, and inventory.
E. Discuss how companies set their credit policies?
F. Explain the effect of credit policy on sales and profits.
G. Describe how the costs of trade credit, bank loans, and commercial paper are determined and how that information impacts decisions for financing working capital.
H. Explain how companies use security to lower their costs of short-term credit.