Syllabus Overview

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View Syllabus Outline (4 topics)

Working Capital Management

1. Working Capital Concepts

Working capital ensures sufficient liquidity for daily business operations.

  • $\text{Net Working Capital} = \text{Current Assets} - \text{Current Liabilities}$

2. Cash and Receivables Management

  • Cash Management: Maintaining optimal cash balances using models like the Baumol or Miller-Orr models to balance transaction needs and opportunity costs.
  • Receivables Management: Setting credit terms and collection policies to optimize sales while limiting bad debts.