Business Administration - Management FIS403 Chapter Notes - Chapter 6.1: Corporate Finance, Cash Flow, Current Asset

• School: Seneca College
• Department: Business Administration - Management
• Course: Business Administration - Management FIS403
• Professor: maria

Document Summary

Chapter 6 - outline: what is working capital management, the nature of asset growth. Temporary, permanent current assets: cash flow cycle, financing alternatives - hedging, the financing decision, risk-return trade-off. Interest rate volatility: summary and conclusions. Describe the effect asset growth has on working capital positions. (lo2) Identify working capital management considerations for permanent components, the effect of sales/production schedules and liquidity versus risk. (lo3) Identify the cash flow cycle of the firm. (lo4) Explain financing of assets in terms of hedging. (lo5) Describe the term structure of interest rates, explain the theories that suggest its shape, and identify how it may be of use to a financial manager. (lo6) Examine risk and profitability in determining the financing plan for current assets. (lo7) Working capital management assets of a firm: controlling, managing and financing the investment in the current, most time-consuming job of a financial manager, crucial to long-term success or failure of a business, sales (revenues) production (costs)