Working Capital and Liquidity - Module 4 – Corporate Issuer – CFA® Level I 2025 (and 2026) скачать в хорошем качестве

Working Capital and Liquidity - Module 4 – Corporate Issuer – CFA® Level I 2025 (and 2026)

Get our FREE CFA Level 1 summaries: https://www.finquiz.com/cfa/level-1/s... 📎 Battle-Ready Summaries – Smart summaries of corporate finance decisions, pecking order, capital structures, and more 👉 https://www.finquiz.com/cfa/level-1/s... 📘 Stanley Notes – Clear breakdowns of topics like NPV vs IRR, payout policies, and working capital traps (yes, they're sneaky) 👉 https://www.finquiz.com/cfa/level-1/n... 📐 Formula Sheet – Your go-to sheet for cost of capital, project evaluation, and leverage ratios 👉 https://www.finquiz.com/cfa/level-1/f... 🧪 Question Bank – Practice corporate issuer questions that actually make you think, not just memorize 👉 https://www.finquiz.com/cfa/level-1/q... 🕐 Mock Exams – Realistic practice under real pressure—with questions on corporate decisions 👉 https://www.finquiz.com/cfa/level-1/m... 📂 Full CFA Level 1 Toolkit 👉 https://www.finquiz.com/cfa/level-1/ 🎓 Upgrade to Premium – Get access to everything + expert strategy to master the “decision-making” topic 👉 https://www.finquiz.com/cfa/level-1/p... 0:00 Introduction: Why Working Capital & Liquidity Matter Overview of importance for daily operations Goals for the session (CCC, liquidity ratios, short-term funding) 0:26 Short-Term Assets & Liabilities Receivables, inventory, payables How payment and delivery terms affect cash flow Example of a 90-day vs. 60-day term mismatch 1:08 The Operating Cycle Definition: Time from cash out (buying materials) to cash in (collecting from sales) Multiple cycles per year and its cash flow implications Production → Sales → Collection → Purchase loop 1:45 Recording Future Cash Flows on the Balance Sheet Short-term assets (A/R, inventory) vs. short-term liabilities (payables, loans) Link to net working capital and daily liquidity 2:30 Cash Conversion Cycle (CCC) Formula: (DOH + DSO) – DPO Why shorter CCC = more efficient cash usage Real-world example: Negative CCC at Dell 3:21 Improving the CCC Minimizing days inventory on hand (inventory optimization) Accelerating days sales outstanding (collection strategies) Extending days payable outstanding (negotiation with suppliers) 4:05 Primary vs. Secondary Liquidity Sources Primary: Cash/securities, borrowings, operating cash flow Secondary: Cutting dividends, issuing equity, selling assets Bankruptcy as a last resort 5:00 Short-Term Financing Needs Impact of cyclical or seasonal cash requirements Bank loans, lines of credit, commercial paper options Trade credits and negotiations 5:35 Drags & Pulls on Liquidity Drags: uncollected receivables, obsolete inventory, restricted borrowing Pulls: early supplier payments, reduced credit lines Managing each to avoid cash crunch 6:15 Liquidity Ratios Current ratio = Current Assets / Current Liabilities Quick ratio (“acid test”) excludes inventory Cash ratio = (Cash + Marketable Sec) / Current Liabilities Benchmarking vs. industry and historical norms 7:00 Real-World Example of Ratio Interpretation High current ratio vs. potential inefficiency Tailoring ratio targets to industry specifics 7:20 Approaches to Working Capital (Conservative, Aggressive, Moderate) Conservative: higher current assets, more long-term funding Aggressive: minimal current assets, more short-term debt Moderate (“matching” approach) balancing risk & cost 8:00 Credit Policies & Receivables Management Trade-off between higher sales and increased A/R risk Early payment discounts, late payment penalties Aligning credit policy with company’s working capital strategy 9:20 Short-Term Financing Strategies Ensuring diverse credit sources (banks, bond markets, trade credit) Minimizing borrowing costs, interest rate fluctuations Seasonal funding demands (e.g., retailers) 10:08 Factors Influencing Short-Term Funding Choices Firm size & credit rating (broader vs. limited financing options) Legal/regulatory environment in emerging vs. developed markets Collateralizable assets & industry-specific constraints 11:00 Example of Managing Seasonal Peaks Retailer ramping up inventory before holidays Use of short-term loans or lines of credit Balancing DSO and DPO in high-volume periods 12:00 Beyond the Basics: Real-World Scenarios Potential for sudden shifts in supply chain or sales cycles 13:00 Advanced Liquidity Tactics Forward contracts, factoring receivables, inventory securitization 14:00 Link to Capital Structure & Risk Management How short-term decisions interface with long-term leverage 15:00 Deeper Dive: Cost-Benefit Analysis of Each Method Opportunity cost of excess cash vs. risk of short supply 16:00 Industry Variations & Market Conditions How commodity cycles, tech disruptions, or economic downturns affect working capital Stress testing liquidity in cyclical vs. stable industries