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What are the three types of financial management decisions and what questions are they designed to answer?
The three types of financial management decisions include capital structure, capital budgeting and working capital. They are designed to answer the main source of capital used to run the firm.
What are the three types of financial management decision and what question are the designed to answer?
The three types of financial management decisions include capital structure, capital budgeting and working capital. They are designed to answer the main source of capital used to run the firm.
What are performance management tools used for?
Performance management tools are personal organization methods. Performance management tools are used for organizing anything effectively and efficiently.
What Tools and techniques used in financial management?
cost of capital,financial leverage,capital budgeting appraisal methods,ABC analysis,ratio analysis and cash flow statements.
Basic tools of capital-structure management include?
Basic tools of capital-structure management include debt financing, equity financing, and hybrid financing. Companies must consider factors such as cost of capital, risk tolerance, and financial flexibility when determining the optimal mix of debt and equity in their capital structure. Additionally, financial ratios like debt-to-equity ratio, interest coverage ratio, and return on equity are used to evaluate and manage the capital structure.
Importance of working capital management?
The term working capital refers to the amount of capital which is readily available to a company. That is, working capital is the difference between resources in cash or readily convertible into cash (Current Assets) and organisational commitments for which cash will soon be required (Current Liabilities). Current Assets are resources which are in cash or will soon be converted into cash in "the ordinary course of business". Current Liabilities are commitments which will soon require cash settlement in "the ordinary course of business". Thus: WORKING CAPITAL = CURRENT ASSETS - CURRENT LIABILITIES In a company's balance sheet components of working capital are reported under the following headings: Current Assets: Liquid Assets (cash and bank deposits) Inventory Debtors and Receivables Current Liabilities: Bank Overdraft Creditors and Payables Other Short Term Liabilities The Importance of Good Working Capital Management From a company's point of view, excess working capital means operating inefficiencies. Money that is tied up in inventory or money that customers still owe to the company cannot be used to pay off any of the company's obligations. So, if a company is not operating in the most efficient manner (slow collection), it will show up as an increase in the working capital. This can be seen by comparing the working capital from one period to another; slow collection may signal an underlying problem in the company's operations. Approaches to Working Capital Management The objective of working capital management is to maintain the optimum balance of each of the working capital components. This includes making sure that funds are held as cash in bank deposits for as long as and in the largest amounts possible, thereby maximising the interest earned. However, such cash may more appropriately be "invested" in other assets or in reducing other liabilities. In recent years there has been an increased focus on Dynamic Discounting as a means of optimizing Working Capital. This methods involves the early payment for goods and services bought in return for a discounted price. Operated properly, this can give a significant return on working capital. Working capital management takes place on two levels: * Ratio analysis can be used to monitor overall trends in working capital and to identify areas requiring closer management * The individual components of working capital can be effectively managed by using various techniques and strategies When considering these techniques and strategies, companies need to recognise that each department has a unique mix of working capital components. The emphasis that needs to be placed on each component varies according to department. For example, some departments have significant inventory levels; others have little if any inventory. Furthermore, working capital management is not an end in itself. It is an integral part of the department's overall management. The needs of efficient working capital management must be considered in relation to other aspects of the department's financial and non-financial performance.
What word means Money used to buy tools and equipment used in production?
Capital is money used to buy tools and equipment to make goods or provide services. Capital goods are machines, tools, buildings and the like, used in production.
Which tools are used in a workshop?
It depends on where your working.
What is capital resources used for?
Capital resources are tools used to create other tools and services for a companies' business. Kraft needs buildings and machinery to make food products to sell.
What shall be the firm repercussions if a firm has paucity of working capital and excess of working capital?
A paucity of working capital can lead to cash flow issues, hindering a firm's ability to meet short-term obligations and potentially resulting in insolvency. Conversely, an excess of working capital may indicate inefficiency, as funds that could be invested or used for growth are tied up in unproductive assets. Both scenarios can negatively impact a firm's profitability and competitiveness in the market. Effective management of working capital is essential to ensure financial health and operational efficiency.
What are tools or equipment used to produce other goods?
The Answer is Capital Goods or Capital Good without the (s)
What does public management mean?
Public management means the use of private-sector management tools by the government. Various private and public domain tools are used to maximize on effectiveness and efficiency.
