Working Capital Management Assignment :: Business Finance

Working Capital Management WorksheetConceptApplication of Concept in Scenario commendation of Concept in readPersonal Experience in your OrganizationShort-term financing planBank loan borrowing from the bank.Stretching due putting off stipendiary its bills.Due to the situation that Lawrence has put the company into, in which Lawrence had borrowed from the bank and deferred payment to Gartner by a week.Brealey, 2005, p. 852In give to meet the liabilities of deferred tax payment and the companys payable obligation, my company has applied for a revolving credit line by our lender. So for the short-run, my company where I am working for has managed to make payment on time. monetary budgetingCash inflow.Cash protrudeflow.The task imposed on the CFO of planning interchange inflow and cash outflow to retain at least a minimum of $50,000 each week while keeping the loan burden to the least level required a careful financial budgeting. Brealey, 2005, p.849At my company, a budget for e xpecting expenses associated with a particular property will be planned. Improvements on the property and projected cash inflow will be assessed in order to have the needed cash handy for the upcoming month. Credit ManagementAccounts receivables.Accounts payables.Regarding the task required based on the scenario in the simulation, the CFO has to negotiate short-term payment and take upion arrangements with its business partners for keeping the amount of cash the company needs to borrow as low as possible.Brealey, 2005, p.814Property managers are told to collect rents from tenants as much as possible each month. To put forth this effort and encouraging them to really make the attempts, special bonus is paid out if a certain percentage on total rent for the property has been reached.Working Capital Management WorksheetConceptApplication of Concept in ScenarioCitation of Concept in ReadingPersonal Experience in your OrganizationCashOffering liquidity.Being better prepared in case of c ash shortage.The requirement of retaining at least a minimum of $50,000 on cash applies to the concept that cash has more liquidity to offer. Also having enough cash on hand increase the chance for the company to survive for unexpected event as illustrated in the scenario where supererogatory liabilities were due because of poor packaging and handling round the shipped equipments. Brealey, 2005, p.821This concept can also be observed in the company where I am with. Besides the weekly check cut to meet our obligations, additional cash has been put aside by our controller. Once it has reached the set level, surplus will be distributed to other properties that have funding shortages for planned projects.