How do financial managers acquire and manage current assets?
Firms must have cash, but cash earns little to no interest but can do other things with cash to earn more interest (T-bills, commercial paper, and money market mutual funds).
Accounts receivable are what customers who buy on credit owe to a firm, and firms must establish credit policies to ensure that credit customers will make their payments (or so they make a profit from this).
Inventories are stocks of materials, work in process, and finished goods a firm holds, and cost of storing and handling inventory items can be significant so these are kept as low as possible.
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Finance
- How do financial managers evaluate capital budgeting proposals?
- How do financial managers determine the firm's capital structure?
- How are the major sources of funds evaluated to meet a firm's short-term and long-term financial needs?
- What are the tools financial managers use to evaluate their company's financial conditions and develop future plans?
- What is the goal of financial management and what issues do financial managers confront?