Accounts receivable Management Size of Investment in Accounts Receivable Percent of credit sales to Total sales Level of sales Terms of sale Quality of customer Collection Efforts

Liquid asset management S CASH- motives for holding casha Transactions: to meet cash needs that arise from doing business. Precautionary: having cash on hand for unexpected needs Speculative: to take advantage of potential profit-making situations

Working-Capital Management Current assets cash, marketable securities, inventory accounts receivable Long- Term Assets equipment, buildings, land Which earn higher rates of return? Which help avoid risk of illiquidity?

Dilemma: Should the firm use retained earnings for: a) financing profitable capital inⅴ estments? b)Paying dividends to stockholders

Balance sheet Current Current Assets Liabilities Debt and Fi Ixed Preferred Assets Shareholders

2 concepts that enhance our understanding of risk... 1) Operating Leverage affects a firm's business risk. 2) Financial Leverage affects a firm's financial risk

0: What are SECURITIes? A: Financial assets that Investors purchase hoping to earn a high rate of return

Top Creators of shareholder value 1999 invested cost of MVA capital return capital Microsoft3282571095456.16%12.64 Gen elect285,320652981929911.92 Intel

Where we've been. Basic Skills:(Time value of money, Financial Statements) Investments: (Stocks, Bonds, Risk and Return) Corporate Finance: (The Investment Decision- Capital Budgeting)

Three Measures of a Project's Risk Project Standing Alone risk