Case summary:
Chief financing officer of Company RR, a speciality coffee manufacturer, is re-thinking about its working capital policy and wants to re-new its line of credit and it wouldn’t ready to build payroll, probably forcing the company out of business.
The scare has forced the company to examine carefully about each component of working capital to make sure it is required, and decide whether the goal is to determine the line of credit are often eliminated entirely.
Previously, it has done little to look at assets and mainly because of poor communication among business functions and the decisions about working capital cannot be made at vacuum.
To discuss: Ways of adopting a financing policy by Company RR either a more aggressive or more conservation one, when it tries to match the maturities of its assets and liabilities.
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Intermediate Financial Management (MindTap Course List)
- Define conservative approach (for short-term financing)arrow_forwardThere are two best source of financing the flexibility and Risk. How may one determine the best source of financing?arrow_forwardExplain briefly what the terms working capital and working capital management imply. Explain the link between current asset policy and liquidity, profit, and risk as well as any other considerations. Which policy do you believe is the best?arrow_forward
- Explain the meaning of the terms working capital and working capital management in a succinct manner. Explain the link between current asset policy and liquidity, profit, and risk as well as any other relevant information. Which policy, in your opinion, is the best?arrow_forwardWhat is an investment policy? Explain the rationale behind the formulation of an investment policy. Why is it necessary, and what factors are taken into account in drawing up an investment policy?arrow_forward“The most appropriate financing pattern would be one in which asset buildup and length of financing terms are perfectly matched.” Discuss the difficulty involved in achieving this financing pattern.arrow_forward
- Identify some investment objectives. Discuss the role that investing plays or could play in a financial plan.arrow_forwardAny investment project carries a variety of risks. Outline possible ways through which the risk factor can be incorporated into a project’s financial assessment process.arrow_forwardThe Capital Asset Pricing Model (CAPM). Write the financial model assumptions, equations, descriptions and financial meaning of each parameters and / or variables, and critique of the model and any idea to improve the modelarrow_forward
- Intermediate Financial Management (MindTap Course...FinanceISBN:9781337395083Author:Eugene F. Brigham, Phillip R. DavesPublisher:Cengage LearningEBK CONTEMPORARY FINANCIAL MANAGEMENTFinanceISBN:9781337514835Author:MOYERPublisher:CENGAGE LEARNING - CONSIGNMENT