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Working Capital Management

IIT Roorkee, , Prof. Prof. Anil K. Sharma

Updated On 02 Feb, 19

Overview

Includes

Lecture 38: Credit Policy Changes- I

4.1 ( 11 )

Lecture Details

Course Details

COURSE LAYOUT

Week1: Introduction, meaning, concepts, classification and importance of working capital, Relevance of current assets and current liabilities in the balance sheet,Objectives of WCM. Over- capitalisation, under- capitalisation, zero working capital, Short-term v/s long term financing-A risk-return trade-off. Liquidity v/s profitability trade-off. Cost trade-off, Working capital approaches. Working capital management in some companies.

Week2: Factors determining working capital requirements, Assessment and forecasting of working capital requirements, Assessment and forecasting of working capital requirements, Operating cycle, Weighted Operating cycle.

Week3Relevance of current assets and current liabilities and their inter-relationship, Management of different current assets, Management of Inventory. Relevance and scope, Deciding the optimum level of inventory in a firm, Purpose and benefits of holding inventory.

Week4
: Risk and cost of holding inventory, Inventory management - tools, techniques, Inventory management - tools, techniques, Inventory management - tools, techniques, Inventory management models.

Week5
: Inventory management models, Determining stock levels and safety stocks, Types of organizations holding inventory, Inventory strategies & techniques, Inventory strategies & techniques.

Week6
Cases on Inventory Management, Management of Accounts Receivables, Creation and size of accounts receivables, Motives of extending credit, Limitations of A/Rs-Marginal tax considerations.

Week7: Limitations of A/Rs-Tax considerations, Determining maximum length of credit period, Credit terms, opportunity costs, receivables at cost or sale price, Goals and functions of A/Rs management, Short-term changes in credit policy, Long-term changes in credit policy.

Week8: Financial statements analysis wrt. A/Rs, Financial statements analysis wrt. A/Rs, Financial, Cash management-meaning and concept statements analysis wrt. A/Rs, Cash management-meaning and concept, Cash v/s profit. Cash flow, cash stock and cash to current assets ratio.

Week9: Cash flow presentation as per IFRS, NOCF & priority outflows, Management of liquidity-Shiftability theory, Liquidity newly defined, liquidity crises 7 firm level action, Measurement of liquidity.

Week10: Window dressing, Certainty model by Baumol, Uncertainty model by Miller & Orr, Cash flow forecasting, Cash collection system.

Week11Management of Accounts Payables, Trade credits-terms of purchase, stretching accounts payables, Cost of Stretching A/Ps, The model of cost of stretching A/Ps, Overtrading and the need of a good information system.
  
Week12: Financing Working Capital Gap, Sources of working capital finance, Bank finance, Tondon and Chore committees on Bank finance, Other sources of working capital finance and deciding a suitable mix.

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Comments
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Sam

Excellent course helped me understand topic that i couldn't while attendinfg my college.

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Dembe

Great course. Thank you very much.

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