WORKING CAPITAL MANAGEMENT
Année du cours : 1 année(s)
Etablissement : IÉSEG School of Management
Langue : English
Formation(s) dans laquelle/lesquelles le cours apparait :
Période : S2
Knowledge of present value and future value; risk assessment and measurement; basic familiarity with financial statements. Typically, a student taking this course would have taken basic courses in financial acounting, managerial finance and statistics.
At the end of the course, the student should be able to:
1. Analyze the effects of working capital policies on equity value and default risk.
2. Design asset-specific working capital policies (cash, inventory, etc) given the characteristics of the industry and firm
3. Determine the best ways to raise and invest short-term funds
4. Design a comprehensive optimal working capital policy for the firm
This course examines the various components of working capital (cash, receivables, payables, inventory), how they interact with one another, and how they affect (i) firm liquidity and default risk, and (ii) shareholder wealth. The course will build on the basic principles of financial management that students will have learned in earlier courses, and will apply the principles and concepts of financial theory to problems and decisions associated with short-term (working) capital. The course will focus on using working capital optimally, so that funds are not tied up in unproductive assets and, at the same time, the risk of illiquidity (and related default risk) does not exceed desired limits. The ultimate objective, as always, is to maximize shareholder wealth. The course includes both theoretical and applied components. Practical applications are useful, but cannot be studied fruitfully without knowledge of the underlying theory. Numerical examples will be use1d to illustrate the various concepts and applications to be covered in the course.
