Professional Documents
Culture Documents
Management
Kiran Thapa
Time devotion
Direct relationship with sales
Important to small firms
More attention
Aggressive policy
Maintain low amount of current assets
Uses high amount of short term financing
Uses low amount of long term financing
Results:
High Return
High Risk
Conservative policy
Conservative policy
Maintain high amount of current assets
Uses low amount of short term financing
Uses high amount of long term financing
Results:
Low Return
Low Risk
Average or moderate policy
Maintain between aggressive and conservative
policy.
Nature of business
Cash conversion cycle
Business cycle
Changes in technology
Supply conditions
Seasonal operations
Competitive conditions
Credit policy
Cash management
Should maintain optimum level
Reasons:
Transaction motive
Compensating balance
Precautionary motive
Speculative motive
Inventory management
Techniques of Inventory
management
How much to order? Economic Order Quantity
When to order? Reorder Level
Accounts receivables
Financing costs
Bad debt costs
Cash discount
Collection costs
DSO
Aging schedule
Any queries?
?
Thank You