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• Title Page
• Copyright
• Contents
• Preface
• Concept of the Book
• Acknowledgments
• Chapter 1 Concepts in Working Capital Management
• WORKING CAPITAL CONCEPTS
• Description of Working Capital Accounts
• Ideas Basic to Working Capital
• IMPROVING WORKING CAPITAL MANAGEMENT
• The Missing Working Capital Manager
• Payment Stream Matrix: First Draft
• Payment Steam Matrix: Final Version
• Overcoming Resistance to Change
• THE SIGNIFICANCE OF WORKING CAPITAL
• Working Capital: The Traditional View
• Working Capital: The Modern View
• COST AS THE WORKING CAPITAL ISSUE
• Working Capital Timeline
• Working Capital Cost Elements
• Illustrative Total Potential Savings
• Leisure Industry Working Capital Illustration
• APPLYING THESE IDEAS TO A REAL BUSINESS: BEST BUY
• What Is Best Buy’s Industry?
• Working Capital at Best Buy
• SUMMARY
• NOTES
• Chapter 2 Working Capital Ratios and Other Metrics
• RATIO ANALYSIS
• How Ratios Are Constructed
• Liquidity
• Activity Utilization
• Profitability
• Leverage
• OTHER RATIOS AND THEIR APPLICATION
• Troy and RMA
• How Ratios Are Used
• OTHER METRICS
• Cash Conversion Cycle
• Dell Computer’s CCC
• BENCHMARKING
• Methodology
• Working Capital Benchmarking
• Benchmarking Concerns
• GENERAL PROBLEMS IN THE USE OF RATIOS AND METRICS
• Fiscal Year
• Accrual Accounting
• Window Dressing
• Aggregated Data
• Off–Balance Sheet Obligations
• SUMMARY
• NOTES
• Chapter 3 Cash—Management and Fraud Prevention
• FORMS OF CASH
• Reactive Cash Management
• Essential Cash Management Elements
• PAPER TRANSACTIONS: LOCKBOXING
• Lockboxing Procedures
• How Does Lockboxing Reduce Float?
• How Does Lockboxing Prevent Fraud?
• PAPER TRANSACTIONS: DEPOSITORY ACCOUNTS
• Control of Access
• Multipurpose Accounts
• Too Many Accounts
• PAPER TRANSACTIONS: CONTROLLED DISBURSEMENT
• Controlled Disbursement Procedures
• Account Reconciliation
• How Does Controlled Disbursement Improve Float?
• How Does Controlled Disbursement Prevent Fraud?
• ELECTRONIC TRANSACTIONS
• Federal Wire Transfer
• Terminal-Based Electronic Payments
• Why Do Frauds Still Occur?
• FLOAT AND COST ISSUES
• Base Case
• Baseline
• Possible Improvements
• First Scenario
• Second Scenario
• SUMMARY
• NOTES
• Chapter 4 Cash—Credit and Short-Term Financial Instruments
• DEVELOPING A SHORT‐TERM FORECAST
• How to Use the Distribution Method
• CASH BUDGETING
• Information Required for the Cash Budget
• How to Prepare the Cash Budget
• CREDIT FINANCING
• Arranging for Bank Credit
• Lines of Credit
• Bank Returns on Lines of Credit
• Asset‐Based Financing
• SHORT‐TERM INVESTMENTS
• “No Effort Investments” and Equivalents
• “Some Effort” Investments and Equivalents
• Policies on Short‐Term Investing
• SUMMARY
• NOTES
• Chapter 5 Managing Bank Relationships
• THE CHANGING FINANCIAL LANDSCAPE
• Financial Deregulation
• BANK RELATIONSHIP MANAGEMENT
• Twenty-First-Century Banking
• Finance as the Gatekeeper to Banking Services
• CASH MOBILIZATION IN A MULTIBANK NETWORK
• Funds Mobilization
• Too Many Bank Accounts?
• Selecting the Bank
• GENERAL TERMS OF CREDIT FACILITIES
• The Basic Provisions
• Representations and Warranties
• Restrictions in Lines of Credit
• SPECIFIC TERMS IN CREDIT FACILITIES
• Pricing the Loan
• ONGOING BANK RELATIONSHIP CONCERNS
• Monitoring Compliance
• Control of Banking Records
• Periodic Relationship Reviews
• SUMMARY
• NOTES
• APPENDIX TO CHAPTER 5 Selecting Noncredit Banking Services
• THE REQUEST FOR PROPOSAL
• Issues Covered in RFPs
• Specific Service Issues
• Review of Pricing
• RFP EVALUATION
• Weighted Scoring of Proposals
• Managing Banking Relationships
• Chapter 6 Accounts Receivable and Working Capital Issues
• ELEMENTS OF RECEIVABLES MANAGEMENT
• Developing Receivables Policies
• Getting to Know You—Getting to Know Your Company!
• FLOAT OPPORTUNITIES IN MANAGING RECEIVABLES
• Calculating Receivables Float
• RECEIVABLES CYCLE MONITORING: RATIOS
• Receivables Ratio Analysis
• Interpretation of Receivables Ratios
• RECEIVABLES CYCLE MONITORING: THE AGING SCHEDULE
• Interpretation of the Aging Schedule
• SALES FINANCING
• Outsourcing Sales Financing
• CREDIT REPORTING
• Reporting on Business Creditworthiness
• Fixing a Company’s Credit Score
• TERMS OF SALE
• Cash Discount Basics
• Cash Discount Decision Factors
• Other Discounts
• INVOICE GENERATION
• Invoice Design
• Invoice and Statement Timing
• Invoices versus Statements
• ASSET‐BASED FINANCING
• Receivables Factoring
• DEBT COLLECTION AGENCIES
• SUMMARY
• NOTES
• Chapter 7 Inventory and Working Capital Issues
• ELEMENTS OF INVENTORY MANAGEMENT
• Developing Inventory Policies
• Organizing for Inventory Management
• INVENTORY CYCLE MONITORING: RATIOS
• Supplemental Data
• INVENTORY CYCLE MONITORING: METRICS
• THE PURCHASING FUNCTION
• The Purchasing Cycle
• Purchasing Cycle Problems
• ANALYZING PURCHASING ACTIVITIES
• A Situation of Decentralized Purchasing
• Investigating a Company’s Payables History
• EOQ AND JIT
• Economic Order Quantity
• Calculation of EOQ
• Just‐in‐Time
• WORK‐IN‐PROCESS
• WIP Cycle Management
• Benefits of Supply Chain Management
• Supply Chain Management Systems
• ABF: INVENTORY FINANCING
• Asset‐Based Lenders: Inventory
• SUMMARY
• NOTES
• Chapter 8 Payables and Working Capital Issues
• ELEMENTS OF PAYABLES MANAGEMENT
• Developing Payables Policies
• Organizing for Payables Management
• PAYABLES CYCLE MONITORING: RATIOS
• Payables Metrics
• THE ACCOUNTS PAYABLE FUNCTION
• Active versus Passive Payables Management
• Float Costs of Mismanaged Payables
• PAYABLES USING INTERNAL PROCESSES
• Checks, ACH, and Fedwire
• Costs of Check Issuance
• Procurement Cards
• PAYABLES OUTSOURCING
• Electronic Disbursements
• Freight Bills
• Comprehensive Payables Concepts
• CHECK PAYMENTS IN A COMPREHENSIVE PAYABLES ENVIRONMENT
• Benefits of Comprehensive Payables
• PAYROLL DISBURSEMENTS
• Mechanics of Direct Deposit
• Promoting Payroll Direct Deposit
• Paycards
• SUMMARY
• NOTES
• Chapter 9 International Working Capital
• CAPITALISM GOES GLOBAL
• Elements of International Working Capital
• Corporate Governance
• THE FINANCING OF INTERNATIONAL TRANSACTIONS
• Global Financial Risks
• Letter of Credit Concepts
• Letter of Credit Documentation
• THE FOREIGN EXCHANGE MARKETS
• FX Mechanisms
• Continuous Link Settlement versus Spot FX
• Factors Influencing FX Rates
• Multicurrency Accounts
• Electronic Payments
• COUNTRY RISK ANALYSIS
• Country Risk Experience
• OTHER SIGNIFICANT ISSUES IN INTERNATIONAL WORKING CAPITAL
• Structures to Manage FX
• EU Tax‐Advantaged Centers
• Cross‐Border Clearing and Settlement
• CULTURAL AND CORPORATE PRACTICES AFFECTING WORKING CAPITAL
• Cultural Differences
• Banking Practices
• Communications Infrastructure
• Legal and Tax Issues
• Time Zones and Language Barriers
• SUMMARY
• NOTES
• Chapter 10 Information and Working Capital
• INFORMATION TECHNOLOGY
• The Special Status of IT
• BANK INFORMATION TECHNOLOGY
• Development of Bank Systems
• Basic Transactional Functionality
• Modules for Standard Services
• Modules for Advanced Services
• INTERNET BANK TECHNOLOGY
• Responsibilities in Banking Decisions
• Benefits of Internet Bank Technology
• Disadvantages of Internet Bank Technology
• ERP: AN ALTERNATIVE APPROACH
• Why ERP?
• Advantages from ERP
• Disadvantages of ERP
• CHOOSING WORKING CAPITAL INFORMATION SYSTEMS
• Information System Problems? It’s Easier to Unplug Than Sue
• Phase 1: Determine Requirements
• Phase 2: Conduct Vendor Search
• Phase 3: Provide Justification to Senior Management
• Information Principles
• SUMMARY
• NOTES
• Chapter 11 Managing the Working Capital Cycle
• RISK AND WORKING CAPITAL
• Risks Inherent in Working Capital
• TRADITIONAL RISK MANAGEMENT
• ENTERPRISE RISK MANAGEMENT
• THE ERM PROCESS
• EFFICIENCY AND WORKING CAPITAL
• Management Differences in Current Asset Accounts
• The Required Teamwork
• WORKING CAPITAL AND LIQUIDITY
• How to Measure and Manage Liquidity
• SUGGESTED ACTIONS
• General Ideas
• Banking Ideas
• Receivables Ideas
• Inventory Ideas
• Payables Ideas
• International Ideas
• Information Technology Ideas
• Ideas on Managing the Working Capital Cycle
• Changes to Working Capital Management—How to Get Started
• DEVELOPMENTS IN WORKING CAPITAL MANAGEMENT
• Twentieth‐ and Twenty‐First‐Century Business Models
• The Cost of a Transaction
• THE GIZMO DEAL: HOW DELAYS TURN PROFITS INTO LOSSES
• Accept or Decline the Deal?
• How These Situations Can Occur
• Interconnectivity in the Twenty‐First Century
• SUMMARY
• NOTES
• Chapter 12 Introduction to Working Capital Cases
• SEQUENCE OF THE CASES
• THE CONCEPT OF THE WORKING CAPITAL CASE
• Case Analysis: Defining the Problem
• CASE: WIDGET MANUFACTURING
• Company History
• The Cash Cycle
• Bank Relationships
• I.M. Cash Is Promoted
• Questions
• Arnold’s Reaction
• Collection Activities
• Disbursement Activities
• U. R. Clueless Gives Advice
• Questions
• The Mexican Option
• Widget’s Information Gap
• Questions
• SUGGESTED SOLUTIONS
• NOTE
• Cases on Working Capital Management
• CASE 1 Dinner Bell Hotel
• CASH FLOW ISSUES
• ALTERNATIVE ACTIONS
• THE “RAW” DATA
• QUESTIONS
• CASE 2 Koala Fun
• THE PARTNERS’ FIRST SUCCESS
• FINANCIAL CONCERNS
• BORROWING ISSUES
• WORKING CAPITAL
• FINAL THOUGHTS
• QUESTIONS
• CASE 3 Miller Building Supplies
• JOSEPH MILLER STARTS MBS
• VARIATIONS IN WORKING CAPITAL REQUIREMENTS
• A BANKER’S ASSISTANCE
• QUESTIONS
• CASE 4 Office Smart
• THE BUSINESS OF OFFICE SMART
• FINANCIAL ISSUES
• QUESTIONS
• CASE 5 Quacker Cracker
• THE ATTITUDE TOWARD DEBT
• FINANCIAL PLANNING
• QUESTIONS
• CASE 6 Young Brands
• CHANGES IN YB’S GLOBAL MARKETING STRATEGY
• FORECASTING CONSIDERATIONS
• WORKING CAPITAL ISSUES
• FINANCIAL ISSUES
• QUESTIONS
• APPENDIX 1 Basic Financial Concepts
• GENERAL BALANCE SHEET ISSUES
• ASSETS AND LIABILITIES
• NET WORTH
• COST OF CAPITAL
• APPENDIX 2 Websites of Working Capital Organizations
• Glossary
• About the Author
• lndex
• EULA