BUSN 70 Lecture Notes - Lecture 41: United States Treasury Security, Accounts Receivable, Preferred Stock
13 Mar 2021
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Document Summary
Too-big-to-fail firms are linked to so many organizations that if they fail, the repercussions would destroy the economy. Bofa is in a precarious situation due to a series of high-risk decisions and investment in mortgage-related securities. Bofa has cut costs by eliminating jobs and berkshire hathaway purchased billion in. Working capital management = the managing of short-term assets and liabilities. Since short-term assets and liabilities continually flow through an organization, they are said to be working . The terms current and short-term are used interchangeably. Current assets: cash, investments, accounts receivable and inventory goal is maximize return on these assets. Current liabilities: accounts payable, accrued salaries, accrued taxes and short-term bank loans. Idle cash does not make money and managers try to keep just enough to pay bills as they fall due. Transaction balances = cash kept on hand by a firm to pay normal daily expenses, such as employee wages and bills for supplies and utilities.
