financial management instructor‘s manual ch17详解.pdfVIP

Chapter 17 Working Capital Management Learning Objectives After reading this chapter, students should be able to:  Explain how different amounts of current assets and current liabilities affect firms’ profitability and thus their stock prices.  Discuss how the cash conversion cycle is determined, how the cash budget is constructed, and how each is used in working capital management.  Explain how companies decide on the proper amount of each current asset—cash, marketable securities, accounts receivable, and inventory.  Discuss how companies set their credit policies, and explain the effect of credit policy on sales and profits.  Describe how the costs of trade credit, bank loans, and commercial paper are determined, and how that information impacts decisions for financing working capital.  Explain how companies use security to lower their costs of short-term credit. Chapter 17: Working Capital Management Learning Objectives 431 © 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Lecture Suggestions We have never found working capital an interesting topic to students; hence it is, to us, a somewhat more difficult subject to teach than most. Perhaps that’s because it comes near the end of the course, when everyone is tired. More likely, though, the problem is that working capital management is really more a matter of operating efficiently than thinking conceptually correctly—i.e., it is more practice than theory—and theory lends itself better to