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Rj-Chapter 16 Essay

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Below is an essay on "Rj-Chapter 16" from Anti Essays, your source for research papers, essays, and term paper examples.




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|Discussions with CFOs quickly lead to the conclusion that, as important as capital budgeting and capital structure decisions are, they are made less frequently, while the     |
|day-to-day complexities involving the management of net working capital (especially cash and inventory) consume tremendous amounts of management time. Also, it is clear that |
|while poor long-term investment and financing decisions will adversely impact firm value, poor short-term financial decisions will impair the firm’s ability to remain         |
|operating. Finally, working capital decisions can also have a major impact on firm value.                                                                                     |

  1. Tracing Cash and Net Working Capital

      Current assets are assets expected to be converted into cash within one year. The major categories of current assets include cash, marketable securities, accounts receivable, and inventory. Current assets are listed on the balance in the order of their liquidity, with the most liquid assets appearing first. Current liabilities are short-term obligations which come due within one year. The major categories of current liabilities include accounts payable, accrued wages and taxes, other expenses, and notes payable.

      Defining Cash in Terms of Other Elements:

          Net working capital + Fixed assets = Long-term debt + Equity

          Net working capital = Cash + Other current assets – Current liabilities

          Substituting NWC into the first equation and rearranging;

          Cash = Long-term debt + Equity + Current Liabilities – Current assets other than cash – Fixed assets

              . Sources...

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MLA Citation

"Rj-Chapter 16". Anti Essays. 18 Dec. 2018


APA Citation

Rj-Chapter 16. Anti Essays. Retrieved December 18, 2018, from the World Wide Web: http://parimatch-stavka7.com/free-essays/Rj-Chapter-16-529733.html

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