4

Analyzing Current Asset Management

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Learning Objectives

By the end of this chapter, you should be able to:

•  Describe the risk/return tradeoff in managing current assets and liabilities.

•  Explain the role of cash management in a business.

•  List the four basic motives for holding cash.

•  Identify three cash collection techniques.

•  Analyze three cash disbursement techniques.

•  List the key issues for a financial analyst when evaluating credit and collection policies.

•  Discuss the role of inventory management in working capital assets management.

Getting Ahead of the Question

“As I was reviewing last month’s report for my division, I ...

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