BUA 330 Study Guide - Midterm Guide: Commercial Bank, Capital Structure, Private Placement
Document Summary
Chapter 14 learning objectives: define net working capital, and discuss the importance of working capital management, net working capital refers to the difference between current assets and current liabilities, nwc = current assets current liabilities, nwc is important because it is a measure of a firm"s liquidity it is the amount of working capital a firm would have left over after it paid off all its short term liabilities, the larger the firm"s nwc the greater its liquidity, define the operating and cash cycles, and explain how they are used, operating cycle the average time between receipt of raw materials and receipt of cash for the sale of finished goods made from those materials o o. 365net sales accounts receivable 365cogs inventory: cash conversion cycle the length of time from the point at which a company pays for raw materials until the point at which it receives cash from the sale of finished goods made from those materials o o.
