Stocks and bonds as investments
In the following section, we will discuss in more depth the pros and cons of owning stocks, from the point of an investor rather than the borrower. This will allow …
Course: Financial Analysis for Business Decisions: Cash Flow Management
How to Determine the Value of Stocks
First, in order to value stocks, we must understand what intrinsic (or fundamental) value is. It is an important concept and is defined as the amount a rational investor would …
Process of issuing a stock
As we’ve stated before, firms will issue stock to raise capital for a variety of business decisions. It is important to note that a firm might also choose to issue …
What are stocks?
There are different types of stocks that companies can issue – below are some of the most common. [1] Common stock. As you may have guessed, this is the most …
Introduction to working capital
Working capital measures liquidity. Liquidity is an organisation’s ability to transform assets into cash. Liquid assets can be cash or a resource that can be quickly turned into cash. Examples …
What are the different types of bonds?
Here, we will focus on the types and categories of bonds that exist, with a specific focus on the Australian Stock Exchange (ASX). This may vary slightly by country, and …
What are bonds?
Managers must be aware of not just short-term but also long-term financing options available to them. Depending on their unique situation, they should be able to opt for the one …
Calculate cash conversion cycle
Use the cash conversion cycle (CCC) to measure the amount of days it takes to convert inventory into cash. The CCC marks the time it takes to sell inventory and …
Manage and set AR policies
If you got paid for sales instantly, you would never have an AR problem and therefore any cash flow problems. However, this rarely happens in the real world. The key …
Prepare an ageing schedule
An ageing schedule is a way of finding out if customers are paying their bills within the credit terms outlined in the company’s credit terms. The ageing schedule is a …
Calculate working capital
Watch the following video as it provides context and goes through an example of how you can calculate working capital using the formula: Current assets – current liabilities Watch: Working …
Calculate allowance for bad debts
Bad debts are customers (AR) that are unable to meet their commitment to pay for their service, product, or whatever widget they have received from you. There is no set …
What is accounts receivable?
Accounts receivable, or AR, is a crucial figure if you allow your customers credit to pay for your service / product after a period of time. Analysing your average AR …
These articles are from the online course:
Financial Analysis for Business Decisions: Cash Flow Management