FIN 301 Chapter Notes - Chapter 5: Fallen Angel, Brad Delson, Dividend Yield
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Payables outstanding: ccc = dsi + dso dpo, managing the cash conversion cycle a. Decrease average collection period by giving customers cash discounts or e. iii. Cash reserves: a firm with a high level of cash and marketable securities does not require much financing for the other current assets that it holds a. ii. Maturity hedging: this strategy matches the maturities of assets and liabilities. Inventories are financed with short-term loans while fixed assets are paid for with long-term debt a. iii. Relative interest rates: a firm"s decision to use either long-term or short-term financing depends on interest rates. The firm decides which term of financing is best for its purposes: capital budgeting: the process of planning and managing a firm"s long-term investments, companies must invest capital to pursue their production and marketing strategies. These include such activities as: expanding facilities and infrastructures to support growth b.
