第二十七章 短期财务与计划

ChapterOutline,27.1TracingCashandNetWorkingCapital27.2DefiningCashinTermsofOtherElements27.3TheOperatingCycleandtheCashCycle27.4SomeAspectsofShort-TermFinancialPolicy27.5CashBudgeting27.6TheShort-TermFinancialPlan27.7Summary&Conclusions,ExecutiveSummary,Wearesolidlyintothethirdgreatquestionofcorporatefinance.,TheBalance-SheetModeloftheFirm,CurrentAssets,FixedAssets1Tangible2Intangible,ShareholdersEquity,CurrentLiabilities,Long-TermDebt,Whatlong-terminvestmentsshouldthefirmengagein?,TheCapitalBudgetingDecision,TheBalance-SheetModeloftheFirm,Howcanthefirmraisethemoneyfortherequiredinvestments?,TheCapitalStructureDecision,CurrentAssets,FixedAssets1Tangible2Intangible,ShareholdersEquity,CurrentLiabilities,Long-TermDebt,TheBalance-SheetModeloftheFirm,Howmuchshort-termcashflowdoesacompanyneedtopayitsbills?,TheNetWorkingCapitalInvestmentDecision,NetWorkingCapital,CurrentAssets,FixedAssets1Tangible2Intangible,ShareholdersEquity,CurrentLiabilities,Long-TermDebt,27.1TracingCashandNetWorkingCapital,CurrentAssetsarecashandotherassetsthatareexpectedtobeconvertedtocashwiththeyear.CashMarketablesecuritiesAccountsreceivableInventoryCurrentLiabilitiesareobligationsthatareexpectedtorequirecashpaymentwithintheyear.AccountspayableAccruedwagesTaxes,27.2DefiningCashinTermsofOtherElements,27.2DefiningCashinTermsofOtherElements,Anincreaseinlong-termdebtandorequityleadstoanincreaseincashasdoesadecreaseinfixedassetsoradecreaseinthenon-cashcomponentsofnetworkingcapital.TheSourcesandUsesofCashStatementfollowsfromthisreasoning.,27.3TheOperatingCycleandtheCashCycle,Time,Accountspayableperiod,Operatingcycle,Cashreceived,Finishedgoodssold,Firmreceivesinvoice,Cashpaidformaterials,27.3TheOperatingCycleandtheCashCycle,Inpractice,theinventoryperiod,theaccountsreceivableperiod,andtheaccountspayableperiodaremeasuredbydaysininventory,daysinreceivablesanddaysinpayables.,27.4SomeAspectsofShort-TermFinancialPolicy,Therearetwoelementsofthepolicythatafirmadoptsforshort-termfinance.TheSizeoftheFirmsInvestmentinCurrentAssetsUsuallymeasuredrelativetothefirmsleveloftotaloperatingrevenues.FlexibleRestrictiveAlternativeFinancingPoliciesforCurrentAssetsUsuallymeasuredastheproportionofshort-termdebttolong-termdebt.FlexibleRestrictive,TheSizeoftheInvestmentinCurrentAssets,Aflexiblepolicyshort-termfinancepolicywouldmaintainahighratioofcurrentassetstosales.Keepinglargecashbalancesandinvestmentsinmarketablesecurities.Largeinvestmentsininventory.Liberalcreditterms.Arestrictiveshort-termfinancepolicywouldmaintainalowratioofcurrentassetstosales.Keepinglowcashbalances,noinvestmentinmarketablesecurities.Makingsmallinvestmentsininventory.Allowingnocreditsales(thusnoaccountsreceivable).,CarryingCostsandShortageCosts,$,InvestmentinCurrentAssets($),Carryingcosts,Totalcostsofholdingcurrentassets.,AppropriateFlexiblePolicy,$,InvestmentinCurrentAssets($),Carryingcosts,Totalcostsofholdingcurrentassets.,WhenaRestrictivePolicyisAppropriate,$,InvestmentinCurrentAssets($),Carryingcosts,Totalcostsofholdingcurrentassets.,AlternativeFinancingPoliciesforCurrentAssets,Aflexibleshort-termfinancepolicymeanslowproportionofshort-termdebtrelativetolong-termfinancing.Arestrictiveshort-termfinancepolicymeanshighproportionofshort-termdebtrelativetolong-termfinancing.,AlternativeFinancingPoliciesforCurrentAssets,Inanidealworld,short-termassetsarealwaysfinancedwithshort-termdebtandlong-termassetsarealwaysfinancedwithlong-termdebt.Inthisworld,networkingcapitalisalwayszero.,FinancingPolicyforanIdealizedEconomy,$,Currentassets=Short-termdebt,Grainelevatoroperatorsbuycropsafterharvest,storethem,andsellthemduringtheyear.Inventoryisfinancedwithshort-termdebt.Networkingcapitalisalwayszero.,27.5CashBudgeting,Acashbudgetisaprimarytoolofshort-tunfinancialplanning.Theideaissimple:Recordtheestimatesofcashreceiptsanddisbursements.CashReceiptsArisefromsales,butweneedtoestimatewhenweactuallycollect.CashOutflowPaymentsofAccountsPayableWages,Taxes,andotherExpensesCapitalExpendituresLong-TermFinancialPlanning,27.5CashBudgeting,Thecashbalancetellsthemanagerwhatborrowingisrequiredorwhatlendingwillbepossibleintheshortrun.,27.6TheShort-TermFinancialPlan,Themostcommonwaytofinanceatemporarycashdeficittoarrangeashort-termloan.UnsecuredLoansLineofcreditdownatthebankSecuredLoansAccountsreceivablefinancingcaneeitherassignedorfactored.Inventoryloansuseinventoryascollateral.OtherSourcesBankersacceptancesCommercialpaper.,27.7Summary&Conclusions,Thischapterintroducesthemanagementofshort-termfinance.Weexaminetheshort-termusesandsourcesofcashastheyappearonthefirmsfinancialstatements.Weseehowcurrentassetsandcurrentliabilitiesariseintheshort-termoperatingactivitiesandthecashcycleofthefirm.Fromanaccountingperspective,short-termfinanceinvolvesnetworkingcapital.,27.7Summary&Conclusions,Managingshort-termcashflowsinvolvestheminimizationofcosts.Thetwomajorcostsare:Carryingcoststheinterestandrelatedcostsincurredbyoverinvestinginshort-termassetssuchascashShortagecoststhecostofrunningoutofshort-termassets.Theobjectiveofmanagingshort-termfinanceandshort-termfinancialplanningistofindtheoptimaltradeoffbetweenthesetwocosts.,27.7Summary&Conclusions,Inanidealeconomy,thefirmcouldperfectlypredictitsshort-termusesandsourcesofashandnetworkingcapitalcouldbekeptatzero.Intherealworld,networkingcapitalprovidesabufferthatletsthefirmmee