Page 13 - FINAL CFA I SLIDES JUNE 2019 DAY 11
P. 13
Session Unit 11:
38. Working Capital Management
LOS 38.c: Evaluate working capital effectiveness of a company based on its operating and cash conversion
cycles and compare the company’s effectiveness with that of peer companies., p. 84
tanties
LOS 38.d: Describe how different types of cash flows affect a company’s net daily cash position., p.84
Daily cash position can be analysed by preparing forecasts of cash inflows and outflows by category:
• short-term (daily or weekly balances for the next several weeks),
• medium-term (monthly balances for the next year), and
• long-term time horizons. Can invest surpluses to
Helps identify periods cash deficits and surpluses! marketable securities
and liquidate these to
address deficits!
Any Examples?
