Working Capital Management syllabus
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Working Capital Management
7 units
1 Introduction (4 LHs)
- Concept and nature of working capital
- Types of working capital
- Components of working capital
- Importance of working capital
- Determinants of working capital
- Concept of working capital management
- Importance of working capital management
- Issues in working capital management
- Management of working capital in Nepal
4 Cash and Marketable Securities Management (10 LHs)
- Overview of cash and marketable securities management
- Motives for holding cash
- Advantages of holding adequate cash and near-cash assets
- Cash management techniques
- Matching the cost and benefits of cash management
- Cash planning and forecasting
- Determining the optimum cash balance under certainty
- Optimum cash balance under uncertainty
- Meaning and characteristics of marketable securities
- Rational for holding marketable securities
- Types of marketable securities
- Criteria for selecting marketable securities
5 Receivable Management (7 LHs)
- Overview of receivable management
- Significance of receivable management
- Role of credit manager
- Costs of maintaining receivables
- Accumulation of receivables
- Credit policy
- Other factors influencing credit policy
- Monitoring accounts receivables
- Role of the credit manager
- Analyzing the changes in the credit policy variables
6 Inventory Management (7 LHs)
1. Introduction (4 LHs)
- Concept and nature of working capital
- Concept and nature of working capital
- Types of working capital
- Types of working capital
- Components of working capital
- Components of working capital
- Importance of working capital
- Importance of working capital
- Determinants of working capital
- Determinants of working capital
- Concept of working capital management
- Concept of working capital management
- Importance of working capital management
- Importance of working capital management
- Issues in working capital management
- Issues in working capital management
- Management of working capital in Nepal
- Management of working capital in Nepal.
2. Working Capital Policy (4 LHs)
- Overview of working capital policy
- Overview of working capital policy
- Risk-return tradeoff in working capital management
- Risk-return tradeoff in working capital management
- Working capital investment and financing policies
- Working capital investment and financing policies: alternative current assets investment polies-restricted, relaxed and moderate policies
- Alternative current financing policy- maturity matching or self-liquidating
- alternative current financing policy- maturity matching or self-liquidating, aggressive and conservative approaches
- Choosing working capital investment and financing policy
- Choosing working capital investment and financing policy.
3. Working Capital Planning and Control (8 LHs)
- Overview of working capital planning and control
- Overview of working capital planning and control
- Concept of working capital cash flow cycle
- Concept of working capital cash flow cycle
- Computation of cash conversion cycle
- Computation of cash conversion cycle
- Determination of working capital
- Determination of working capital
- Working capital management ratios
- Working capital management ratios: ratios measuring liquidity, structure, and efficiency
- Working capital and inflation
- Working capital and inflation.
4. Cash and Marketable Securities Management (10 LHs)
- Overview of cash and marketable securities management
- Overview of cash and marketable securities management
- Motives for holding cash
- Motives for holding cash
- Advantages of holding adequate cash and near-cash assets
- Advantages of holding adequate cash and near-cash assets
- Cash management techniques
- Cash management techniques: cash flow synchronization, check clearing process, using float, acceleration of receipt, disbursement control, transfer mechanism
- Matching the cost and benefits of cash management
- Matching the cost and benefits of cash management
- Cash planning and forecasting
- Cash planning and forecasting: preparation of cash budget
- Determining the optimum cash balance under certainty
- Determining the optimum cash balance under certainty: Boumol’s model
- Optimum cash balance under uncertainty
- Optimum cash balance under uncertainty: Miller–Orr model
- Meaning and characteristics of marketable securities
- Meaning and characteristics of marketable securities
- Rational for holding marketable securities
- Rational for holding marketable securities
- Types of marketable securities
- types of marketable securities
- Criteria for selecting marketable securities
- Criteria for selecting marketable securities.
5. Receivable Management (7 LHs)
- Overview of receivable management
- Overview of receivable management
- Significance of receivable management
- Significance of receivable management
- Role of credit manager
- Role of credit manager
- Costs of maintaining receivables
- costs of maintaining receivables
- Accumulation of receivables
- Accumulation of receivables
- Credit policy
- Credit policy: credit standard, cash discount, credit standard, collection policy
- Other factors influencing credit policy
- Other factors influencing credit policy
- Monitoring accounts receivables
- Monitoring accounts receivables: days’ sales outstanding and aging schedule
- Role of the credit manager
- Role of the credit manager
- Analyzing the changes in the credit policy variables
- Analyzing the changes in the credit policy variables.
6. Inventory Management (7 LHs)
- Overview of inventory management
- Overview of inventory management
- Types of inventory
- Need to hold inventories
- Need to hold inventories
- Significance of inventory management
- Significance of inventory management
- Determining the inventory investment
- Determining the inventory investment
- Inventory cost
- Inventory cost: carrying cost, ordering costs, total inventory costs
- The optimum order quantity
- The optimum order quantity: economic order quantity
- Reorder point, reorder point, safety stock and goods in transit
- reorder point, reorder point, safety stock and goods in transit
- Inventory control system
- Inventory control system: ABC system
- JIT system
- Computerized system, Outsourcing
- Computerized system, Outsourcing.
7. Working Capital Financing (8 LHs)
- Nature of working capital financing
- Nature of working capital financing
- Short-term versus long-term financing
- Short-term versus long-term financing
- Sources of short term financing
- Sources of short term financing: accruals, trade credit, bank loan, commercial papers, accounts receivable financing (pledging and factoring), inventory financing (floating lien, chattel mortgage, trust receipt loan and warehouse financing)
- Cost of sources of short-term financing
- Cost of sources of short-term financing
- Factors to be considered in working capital financing
- Factors to be considered in working capital financing.