MGMT 3320 Chapter Notes - Chapter 6: Yield Curve, Current Asset, Accounts Payable
30 Mar 2017
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The key to current asset planning is the ability of management to forecast sales accurately then to match production schedules. All of the firm"s current assets are self-liquidating. Short-term and sold at the end of a specified time period a) b) Expand business by adding radios, seat covers, batteries to operation. Some of inventory is completely liquidated but others form basic stock to operation. As you grow, permanent stock of current assets increases. Problems of inadequate financing are often result of businessperson"s failure to realize the firm is carrying permanent current assets. Level production methods: smooth production schedules and use labour/equipment efficiently at a lower cost. Consequence is that current assets go up/down when sales and production are not equal. Other firms try to match sales/production to eliminate seasonal budges etc. Publishing companies (if company management doesn"t plan inventory correctly loss sales/excess inventory can be a problem)
