《F9財(cái)務(wù)管理》課程教學(xué)大綱一、課程基本信息課程代碼：16014703課程名稱：F9財(cái)務(wù)管理英文名稱：FinancialManagement課程類別：專業(yè)課學(xué)時(shí)：48學(xué)分：3適用對(duì)象:國(guó)際會(huì)計(jì)（ACCA）創(chuàng)新實(shí)驗(yàn)區(qū)本科生考核方式：考試先修課程：F3財(cái)務(wù)會(huì)計(jì)、F7財(cái)務(wù)報(bào)告二、課程簡(jiǎn)介本課程主要讓學(xué)生掌握企業(yè)財(cái)務(wù)管理的基本理論、基本概念和基本方法；熟悉營(yíng)運(yùn)資本項(xiàng)目管理、投資管理、收入和利潤(rùn)管理的相關(guān)知識(shí)；掌握財(cái)務(wù)預(yù)算、財(cái)務(wù)控制和財(cái)務(wù)分析的能力；熟悉金融市場(chǎng)；樹立現(xiàn)代財(cái)務(wù)管理的基本觀念，具有從事經(jīng)濟(jì)管理所必須的財(cái)務(wù)管理業(yè)務(wù)知識(shí)和工作能力。英文簡(jiǎn)介Thiscourseistoletstudentsmasterthebasictheoryofenterprisefinancialmanagement,thebasicconceptsandbasicmethods;knowledgeofworkingcapitalmanagement,projectinvestmentmanagement,revenueandprofitmanagement;graspthefinancialbudget,financialcontrolandfinancialanalysisskills;Studentsshouldbefamiliarwithfinancialmarket,establishthebasicconceptofmodernfinancialmanagementandhastheknowledgeandworkabilityinfinancialmanagementofbusiness.三、課程性質(zhì)與教學(xué)目的本課程為專業(yè)必修課。通過(guò)本課程的學(xué)習(xí)，使學(xué)生明確財(cái)務(wù)管理的含義，目標(biāo)和特點(diǎn)，認(rèn)識(shí)做好財(cái)務(wù)管理工作對(duì)于促進(jìn)生產(chǎn)經(jīng)營(yíng)、提高經(jīng)濟(jì)效益的重要意義；理解財(cái)務(wù)管理的基本內(nèi)容，懂得各種財(cái)務(wù)活動(dòng)的聯(lián)系以及財(cái)務(wù)活動(dòng)同其他經(jīng)濟(jì)活動(dòng)的聯(lián)系；在系統(tǒng)掌握財(cái)務(wù)管理的基本理論和基本知識(shí)的基礎(chǔ)上，熟練掌握財(cái)務(wù)管理的各種業(yè)務(wù)方法，具有一定的財(cái)務(wù)分析和解決財(cái)務(wù)管理問(wèn)題的能力，為經(jīng)營(yíng)決策服務(wù)，并為學(xué)習(xí)其他課程打下良好的基礎(chǔ)。四、教學(xué)內(nèi)容及要求第一模塊Financialmanagementfunction（一）目的與要求1.理解企業(yè)財(cái)務(wù)管理的目標(biāo)和企業(yè)目標(biāo)的關(guān)系；2.理解利益相關(guān)者對(duì)財(cái)務(wù)管理目標(biāo)的影響；3.了解非盈利組織財(cái)務(wù)管理目標(biāo)。（二）教學(xué)內(nèi)容第一節(jié)1.主要內(nèi)容(1)ThenatureandpurposeoffinancialmanagementFinancialmanagementcanbedefinedasthemanagementofthefinancesofanorganizationinordertoachievethefinancialobjectivesoftheorgnisation.SettingfinancialobjectivesDecidingon: proposedinvestmentsfundingsourcesdistributionofearningsControllingresourcesManagingrisk(2)FinancialobjectivesandtherelationshipwithcorporatestrategyStrategyOverallgoalscascadeddownthroughtheorganizationCorporateobjective→corporatestrategy↓Businessobjectives→businessstrategy↓Operationsobjectives→objectivesstrategyCorporateobjectivesarerelevantfortheorganizationasawhole,relatingtokeyfactorsforbusinesssuccess.(3)FinancialobjectivesShareholderwealthmaximization(deemedmain/primaryobjective)Profitmaximization(focusonshort-termgain)Earningspersharegrown(commonobjectivebutstillbasedonprofits)Maximizingandsatisfying(distinctionbetweenachievingmaximumreturnsandsimplyachievingenoughtosatisfyshareholders)Arestrictiononthecompany’slevelofgearingordebtAtargetforprofitretentionAtargetforoperatingprofitability(4)Maximizationofshareholderwealth:InvestmentdecisionNewprojects(positiveNPVinvestmentsshouldincreasetheshareprice)AcquisitionsWorkingcapitalFinancingdecision(usingappropriatelevelsofdebtfinance)RaisingcapitaltofinanceinvestmentMinimizecostofcapitalDividenddecisionPayoutorreinvestment(determinedbyinvestmentopportunitiesandwillingnesstousedebtfinance)(5)Non-financialobjectives(difficulttomeasure)Welfareofemployees(Goodemployeerelations)WelfareofmanagementWelfareofE.g.greenpoliciesProvisionofcertainlevelofserviceResponsibilitiestowardscustomers/suppliersGrowthDiversificationQualityLeadershipinresearchanddevelopment.(6)StakeholdersandimpactoncorporateobjectivesStakeholdergroupsInternalManagersEmployeesConnectedShareholdersDebt-holdersCustomersBankersSuppliesCompetitorsExternalGovernmentPressuregroupsLocalandnationalcommunitiesProfessionalandregulatorybodiesStakeholderobjectivesThecommunityatlarge:legalandsocialresponsibilities,pollutioncontrol,employeewelfareOrdinaryshareholders:wealthmaximization,ROCE,EPS,gearing,growth,assetutilization,marketsharepayables:beingpaidthefullamountduebythedateagreed,continuingthetradingrelationshipLong-termpayables:theabilitytorepaythefinanceincludinginterest,long-termsolvency:interestcover,gearingEmployees:salaryandbenefits,continuityofemployment,workingconditionsManagers:balancetheinterestsofshareholdersandotherstakeholders,long-term(defendingagainsttakeovers,salesmaximization),short-term(profitmarginsleadingtoincreasedbonuses)remunerationpackageGovernment:taxation,provisionofgrants,healthandsafetylegislation,traininginitiatives,highlevelsofemploymentCustomers:leadtimes,priceTheinfluenceofthevariousstakeholdersresultsinmanyfirmsadoptingnon-financialobjectivesinadditiontofinancialonesThesemightincludeobjectivessuchas:MaintainingacontentedworkforceShowingrespectfortheenvironmentProvidingatopqualityservicetocustomers2.基本概念和知識(shí)點(diǎn)Strategyisacourseofaction,includingthespecificationofresourcesrequired,toachieveaspecifiedobjective.Financialstrategyisthatareaofacompany’soverallstrategywithinthescopeofthefinancialmanagers.Theidentificationofthepossiblestrategiescapableofmaximizinganorganization’snetpresentvalue,theallocationofscarcecapitalresourcesamongthecompetingopportunitiesandtheimplementationandmonitoringofthechosenstrategysoastoachievestatedobjectives.3.問(wèn)題與應(yīng)用（能力要求）Howtounderstandtherelationshipbetweenstrategyandfinancialstrategy?第二節(jié)1.主要內(nèi)容(1)CorporateobjectivesProfitability:ROCE,ROEReturnoncapitalemployed=Profitmargin×Assetturnover(ROCE)↓ ↓↓PBIT/Capitalemployed= (PBIT/Salerevenue)×(Salerevenue/Capitalemployed)PBIT=profitbeforeinterestandtaxCapitalemployed=equity+long-termliabilities=totalassetslesscurrentliabilitiesDisadvantageofROCE:UsesprofitwhichisnotdirectlylinkedtotheobjectiveofmaximizingshareholderwealthThechangeinROCEfromoneyeartothenext.Returnonequity=Profitavailabletoordinaryshareholders/shareholders’equityROE=profitaftertaxandpreferencedividends/(ordinarysharecapital+reserves)DebtandgearingratiosGearingistheamountofdebtfinanceacompanyusesrelativetoitsequityfinanceLiquidityratio:currentratio,quickratio,stockturnover,accountreceivableturnover,accountpayableturnoverShareholder’sinvestmentratios:dividendyield,EPS,P/Eratio,dividendcoverEPS=earningsdistributedtoordinaryshareholders/weightedaveragenumberofordinaryshares(earningspershare)P/E=marketpricepershare/EPS=totalmarketvalueofequity/totalearningsDividendyield=dividendpershare/Ex-divmarketpricepershareDividendyieldiscalculatedagainstthesharepriceatthestartoftheTotal shareholder return=dividendyield+capital gain(better thanprofit-basedmeasuresEPS,ROCE)(2)ManagerialrewardschemesPerformance-relatedMinimumprofitlevelsEconomicvalueadded(TurnovergrowthRewardingmanagerswithsharesExecutiveshareoptionsplans(EPOPs)corporategovernancecodesCorporategovernanceisthesystembywhichcompaniesaredirectedandcontrolled.Goodcorporategovernanceinvolvesriskmanagementandinternalcontrol,accountabilitytostakeholdersandothershareholdersandconductingbusinessinanethicalandeffectiveThekeyareasrelatetocorporategovernancecodesNon-executivesdirectors(NEDs).ExecutivedirectorsRemunerationcommitteesNominationcommitteesAnnualgeneralmeeting(AGM)(3)Financialandotherobjectivesinnot-for-profitorganizationsformoneyformoneycanbedefinedasgettingthebestpossiblecombinationofservicesfromtheleastresources,whichmeansmaximizingthebenefitsforthelowestpossiblecost.MeasuringVFMEconomyisattainingtheappropriatequantityandqualityofinputsatlowestcosttoachieveacertainlevelofoutputs.(Obtainingresourcesata‘fair’price)Efficiencyistherelationshipbetweeninputsandoutputs.(Gettingmaximumoutcomesfromresources)Effectivenessistheextenttowhichdeclaredobjectives/goalsaremet.(Obtaininggoodresults)2.基本概念和知識(shí)點(diǎn)Agencytheory(thedivorceofownershipandcontrol)Agencyrelationshipsoccurwhenonetheprincipal,employsanothertheagent,toperformataskontheirbehalf.Inparticular,directors(agents)actonbehalfofshareholders(principals).Stakeholdersaregroupswhoseinterestsaredirectlyaffectedbyactivitiesoforganizations.3.問(wèn)題與應(yīng)用（能力要求）Howtounderstandthefollowingaccusationsofnon-goal-congruentbehaviorhavebeenmadeagainstmanagemen?ExcessiveremunerationlevelsEmpirebuildingCreativeaccountingOff-balance-sheetfinancingInappropriatereactiontotakeoverbidsUnethicalactivities.（三）思考與實(shí)踐理解和掌握財(cái)務(wù)目標(biāo)的定量衡量方法。這些指標(biāo)各自有什么意義和局限性？（四）教學(xué)方法與手段課堂講授、多媒體教學(xué).（五）思政內(nèi)容在講述企業(yè)的目的時(shí)，應(yīng)當(dāng)強(qiáng)調(diào)在中國(guó)特色社會(huì)主義制度下企業(yè)應(yīng)當(dāng)承擔(dān)的責(zé)任以及我國(guó)國(guó)有企業(yè)應(yīng)當(dāng)承擔(dān)的責(zé)任。2017年12月12日，習(xí)近平視察徐工集團(tuán)時(shí)強(qiáng)調(diào)：“國(guó)有企業(yè)是中國(guó)特色社會(huì)主義的重要物質(zhì)基礎(chǔ)和政治基礎(chǔ)，是中國(guó)特色社會(huì)主義經(jīng)濟(jì)的‘頂梁柱’。要按照黨的十九大部署推動(dòng)國(guó)有企業(yè)深化改革、提高經(jīng)營(yíng)管理水平，使國(guó)有企業(yè)成為貫徹新發(fā)展理念、全面深化改革的骨干力量，成為我們黨執(zhí)政興國(guó)的重要支柱和依靠力量?！薄绊斄褐毙蜗蟮乇砻髁藝?guó)有企業(yè)在建設(shè)中國(guó)特色社會(huì)主義事業(yè)中的地位和作用。在講述企業(yè)的目的時(shí)，應(yīng)當(dāng)突出企業(yè)應(yīng)當(dāng)承擔(dān)的社會(huì)責(zé)任。第二模塊Financialmanagementenvironment（一）目的與要求1.了解宏觀經(jīng)濟(jì)政策的種類和作用2.了解金融市場(chǎng)的種類和特色3.熟悉金融的類別和特點(diǎn)（二）教學(xué)內(nèi)容第一節(jié)1.主要內(nèi)容（1）TheeconomicenvironmentforbusinessTheobjectivesofmacroeconomicpolicyEconomicgrowthLowinflationHighemploymentBalanceofpaymentsstabilityappropriatedistributionofincomeandwealthThereareconflictsbetweenobjectives:-highemployment&pricestability;-economicgrowth&balanceofpayment,etc.Simultaneousachievementofalltheobjectivesisdifficult,andhencegovernmenthavetoconsidertrade-offsbetweenobjectives（2）exchangeratepolicyAchangeintheexchangeratewillaffecttherelativepricesofdomesticandforeignproducedgoodsandservices.(I.e.exchangeratedecreasestoimprovebalanceofpaymentsposition)（3）competitionpolicy(Governmentinterventionandregulation)Themorespecificmeasurestakentoregulatebusinessbygovernmentincludepricingrestrictionsgreenpoliciescorporategovernance（4）governmentassistanceforbusinessOfficialaidschemesTheenterpriseinitiative（5）ThenatureandroleoffinancialmarketsandinstitutionsFinancialintermediation:institutionsinvestotherpeople’smoneyInvestmentbanksSavingbanksPensionfundsInsurancecompaniesInvestmenttrustsandunittrusts（6）TheroleoffinancialintermediationMaturitytransformationAggregationoffundsPoolinglosses2.基本概念和知識(shí)點(diǎn)Monetarypolicyisundertakenbygovernmentindirectlythroughbanks&financialintermediariesviainterestratebankingetc.Itcontrolstheoutputviamanagingthemoneysupplyusinginterestratepolicy(i.e.supplysideeconomy)Fiscalpolicyisundertakenbygovernmentdirectlyviataxationgovernmentexpendituresplans,etc.Itcontrolstheoutputviamanagingtheaggregatedemand(i.e.demandsideeconomy)3.問(wèn)題與應(yīng)用（能力要求）了解政府運(yùn)用不同宏觀經(jīng)濟(jì)政策和工具對(duì)企業(yè)的影響。第二節(jié)1.主要內(nèi)容（1）FinancialmarketsInternationalmoneyandcapitalmarketsareavailableforlargercompanieswishingtoraiselargeramountsoffinance.Internationalmoneymarkets:EurocurrencymarketsInternationalcapitalmarkets:Eurobonds（2）atesofinterestandratesofreturnThepatternofinterestratesonfinancialassetsisinfluencedbytheriskoftheassets,thedurationofthelending,andthesizeoftheloan.therisk-returntrade-offinvestorsinriskierassetsexpecttobecompensatedfortherisk,someofthemainformsofinvestmentarelistedbelowinascendingorderofrisk:governmentbondscompanybondspreferencesharesordinaryshares（3）treasuryfunction3.1theroleofmoneymarketsProvidingshort-termliquiditytoindustryandthepublicsectorProvidingshort-termtradefinanceAllowinganorganizationtomanageitsexposuretoforeigncurrencyriskandinterestraterisk.（4）moneymarketinstrumentsInterest-bearinginstrumentsDiscountnstrumentsDerivativeproductsMoneymarketdepositsTreasurybill(T-bill)ForwardsandfuturesCertificateofdeposit(CD)Banker'sacceptance(BA)SwapsRepurchaseagreements(Repo)(CP)Optionsmoneymarketdepositsareveryshort-termloansbetweenbanksorotherinstitutionsincludinggovernments.Certificateofdeposit(CD)isacertificateofreceiptforfundsdepositedatabankorotherfinancialinstitutionforaspecifiedtermandpayinginterestataspecifiedtermandpayinginterestataspecifiedrate.Repurchaseagreements(Repo)isanagreementbetweentwocounterpartiesunderwhichonecounterpartyagreestosellaninstrumenttotheotheronanagreeddateforanagreedprice,andsimultaneouslyagreestobuybacktheinstrumentfromthecounterpartyatalaterdateforanagreedprice.treasurybills(T-bill)aredebtinstrumentsissuedbythegovernmentwithmaturitiesrangefromonemonthtooneCommercialpaperisshort-termunsecuredcorporatedebtwithmaturityupto270days.Banker'sacceptance(BA)arenegotiablebillsissuedbycompaniesandguaranteedbyabank.FutureisanagreementtobuyorsellastandardquantityofaspecifiedassetonafixedfuturedateatapriceagreedForwardisanagreementoff-exchangebetweentwopartiestomakeortakedeliveryofanassetforanagreedpriceatafuturedate.Optionisacontractthatconferstheright,butnottheobligation,tobuyorsellanassetatagivenprice(exercisepriceorstrikeprice)onorbeforeagivendate.2.基本概念和知識(shí)點(diǎn)Capitalmarketsaremarketsforlong-termcapital,providesfundsforthelong-term.market(provideaccesstoawiderpoolofequityfinance)Bondmarket(bonds(secured,traded),loannotes,debentures,junkbonds(unsecured))Euromarkets(Eurobonds,cheap,unsecured,traded,companieswithanexcellentcreditratingtheabilitytoborrowinavarietyofdifferentcurrencies)Moneymarketsaremarketsforshort-termcapitalTreasurybills(issuedbygovernments)Certificatesofdeposit(canbesoldonCommercialpaper(issuedbycompanieswithahighcreditrating)Billsofexchange(companyIOUsignedbycustomer)3.問(wèn)題與應(yīng)用（能力要求）不同金融工具的特點(diǎn)。（三）思考與實(shí)踐企業(yè)應(yīng)如何選擇使用不同金融工具進(jìn)行融資。（四）教學(xué)方法與手段課堂講授、多媒體教學(xué)。（五）思政內(nèi)容十九大報(bào)告明確指出，深化金融體制改革，增強(qiáng)金融服務(wù)實(shí)體經(jīng)濟(jì)能力。金融要為實(shí)體經(jīng)濟(jì)服務(wù)，而非與實(shí)體經(jīng)濟(jì)搶奪資金進(jìn)而獨(dú)立運(yùn)行。因此，金融工具的使用要用于為實(shí)體經(jīng)濟(jì)服務(wù)，且金融機(jī)構(gòu)的運(yùn)行要在政府嚴(yán)格的監(jiān)控之下進(jìn)行。第三模塊Workingcapitalmanagement（一）目的與要求1.了解營(yíng)運(yùn)資本管理的目標(biāo)2.掌握營(yíng)運(yùn)資本管理的原則3.掌握營(yíng)運(yùn)資本管理模型的計(jì)算及其意義（二）教學(xué)內(nèi)容第一節(jié)1.主要內(nèi)容（1）Thenature,elementsandimportanceofworkingcapitalKeyelementsofworkingcapitalCurrentassetsCurrentliabilityCashCreditorsInventoryorstocksShort-termloansReceivablesLong-termloanswithin1yearMarketablesecuritiesLeaserentalsduewithinoneyearObjectivesofworkingcapitalEnsuresufficientliquiditytopayshort-termdebtsastheyfalldueIncrease and are a short-terminvestment)Trade-offbetweencashversesprofitsNetworkingcapital=currentassets-currentliabilitiesWorkingcapitalcycle(cashcycle/operatingcycle/tradingcycle)Meansthetimeperiodfrominvestmoney(paytosuppliers)tocollectmoney(receivefromcustomers),canbemeasuredby:=Averagetimethatrawmaterialsremaininstock+Productiontime+Cashcollectiontimecreditperiodsuppliers（2）LiquidityratiosCurrentratio=currentassets/currentsliabilitiescurrentratio2ispreferable;however,itdependsonwhatindustriesthecompanyisin.Quickratio(acidtestratio)=(Currentassets-inventories)/currentliabilitiesWithslowinventoryturnover,itisbetter>1Withquickinventoryturnover,itcan<1Accountsreceivablespaymentperiod(approximate)=(Tradereceivables/creditsalesrevenue)×365daysInventoryturnoverperiod=(Averageinventory/costofsales)×365daysWIPproductionperiod=averageWIP/costofsales×365daysperiod =average raw inventory/annualpurchases×365daysAccountspayablepaymentperiod=(Averagetradepayables/purchaseorcostofsales)×365days（3）overtradingOver-capitalizationVSovertradingPrudentpolicyinfinanceVSaggressivepolicyExamfocus– Diagnoseovertrading/overcapitalizationSuitablesolutionstoreducethedegreeofovertradingTheintroductionofnewlong-termcapitalImproveworkingcapitalmanagementefficiency(bettercontrolcouldbeappliedtoinventoriesandaccountsreceivable)Abandonambitiousplansforincreasedsalesandmorenon-currentassetpurchases2.基本概念和知識(shí)點(diǎn)Overcapitalisation–tooslowly–Workingcapitalturnoverperiodlong–LiquidityratioincreaseOvertrading–tooquicklydevelopwithlittlelong-termcapital–Rapidincreaseinturnover–Rapidincreaseincurrentassets–Increaseincreditor/overdraft–Smallincreaseinmoreincreaseincurrentliabilities–Liquidityratiosfall,evenliquiddeficit3.問(wèn)題與應(yīng)用（能力要求）Overcapitalisation和Overtrading各自的特點(diǎn)和成因。第二節(jié)1.主要內(nèi)容（1）ManagingworkingcapitaloptimumorderquantitiesforinventoryTheassumptionsofEOQDemandandleadtimeareconstantandknownPurchasepriceisconstantNobufferinventoryheld(notneeded)EOQ-economicorderquantity=(2CoD/Ch)?Coorderingcosts(perorder)DexpectedannualdemandChholdingcostperstockunitperannumannualcostofstock=holdingcost+reorderingcost=(averagestockｘCh)+(NumberofreorderspaｘCo)Averagestock=EOQ/2,nobufferstockNumberofreorders(itcanbenotaninteger)=D/EOQDecisionofordersizebetweenEOQandbulkdiscountHowtodeterminecomparethetotalcostsandchoosethecheapestoneAveragestock=Q/2+bufferstockIfbulkpurchasediscountsareavailabletheimpactoftheseontotalinventoryrelatedcostsneedsneedtobeassessed.Totalcosts=purchasecosts+holdingcosts+reorderingcostsExample1Theannualdemandforanitemofstockis125units.Theitemcosts￡200aunittopurchase,theholdingcostfor1unitfor1yearis15%oftheunitcostandorderingcostsare￡300anThesupplieroffersa3%discountfororderof60unitsormore,andadiscountof5%forordersof90unitsormore.Whatisthecost-minimisingordersize?EOQignoringdiscountis(2*300*125/200×15%)?=50unitsPurchasecost125*200=25000Orderingcost2.5*300=750Holdingcost(50/2)*30=750costs=2650060unitsperorder@3%discountPurchasecost25000*(1-3%)=24250Orderingcost(125/60)*300=625Holdingcost(60/2)*15%*200*97%=873costs=2574890unitsperorder@5%discountPurchasecost25000*95%=23750Orderingcost(125/90)*300=416.7Holdingcost(90/2)*15%*200*95%=1282.5costs=25449.2Thecheapestoptionis90unitsperorderJust-in-timeprocurementThedefinitionofJITJITisaworkfloworganizationtechniquetoallowrapid,highflexibleproductionwhilstminimizingstocklevelsandmanufacturingwaste.–NostockBenefits:ReducingstockholdingcostReductioninaccounting/admincostReducedscrap/rework/warrantycostReducingmanufacturingleadtimesImprovedproductivityImprovedthesupplierrelationship–DrawbacksNoteasytobuildsuchasystem,itspendabout25yearstorunJITsuccessfulItisnotsuitableforallindustries.DependentonqualityandreliabilityLong-termtrustingrelationships.PhysicalproximityIncreasetheriskofnotbeingabletomeetdemandduetoproductionproblemsorbecauseofunexpectedincreasesindemand.Example2Hexiconplcmanufacturesandmarketsautomaticwashingmachines.Amongthemanyhundredsofcomponentswhichitpurchaseeachyearfromexternalsuppliersforassemblingintothefinishedarticlearedrivebelts,ofwhichituses40,000unitspa.Itisconsideringconvertingitspurchasing,deliveryandstockcontrolofthisitemtoajust-in-timesystem.Thiswillraisethenumberofordersplacedbutlowertheadministrativeandothercostsofplacingandreceivingorders.DetailsofactualandexpectedorderingandcarryingcostsaregiveninthetableActual ProposedOrderingcostperorder $100 $25Purchasingcostperitem$2.50 $2.50Inventoryholdingcost 20% 20%(asapercentageofthepurchasecost)implementthenewarrangementswillrequire‘one-off’reorganizationcostsestimatedat$4,000whichwillbetreatedasarevenueitemfortaxpurposes.Therateofcorporationtaxis33%andHexiconcanobtainfinanceat12%.Theeffectivelifespanofthenewsystemcanbeassumedtobe8years.DeterminetheeffectofthenewsystemonEOQ;Determinewhetherthenewsystemisworthwhileinfinancialterms.(i)PresentEOQ=(2CD/H)?=[(2ｘ$100ｘ40,000)/(20%ｘ$2.50)]?=4,000units/orderProposedEOQ=[(2ｘ$25ｘ40,000)/(20%ｘ$2.50)]?=2,000units/orderfromthisitcanbeseenthattheEOQishalved.(ii)Firststep:holdingcostreduced=(4,000/2-2,000/2)ｘ$2.5ｘ20%=$500reorderingcostreduced=40,000/4,000ｘ$100-40,000/2,000ｘ$25=$500inventorycostreduced=$1,000(beforetax)Consideringshield,totalinventorycostreduced=$1,000ｘ67%=$670Secondstep:calculateNPVCash flow factor value4.968 $3,3290 costofreorganization (4,000) 1.000 (4,000)0 taxsaving(againtaxshield) 1,320 1.000 1,320NetPresent649AsNPVispositive,thisproposalisworthwhile.（2）ManagementofaccountsreceivablesReceivablesmanagementrequiresa4-stepapproachAreceivablespolicy(whethertooffercredit,whattermstooffer)Acreditanalysissystem(references,creditratings)Acreditcontrolsystem(reviewofcreditlimits)Adebtcollectionsystem(statements,reminders,debtfactor)CreditpolicyCostofcreditcontrol--interest,managementcost,implementalcostRiskofcredit--baddebtHigherreceivablescanbeinvestmentsthathelptoboostfuturecashflowsbutcausehigherfinance(overdraft)costs.Extensionofcredit(cost-benefitanalysis)TheprofitabilityoftheextrasalesThesafetyTherequiredrateofreturnontheinvestmentinadditionalaccountsreceivableCompetitionsituationFinancingcostsandcostsofcreditcontrolExample3EnticementCocurrentlyexpectssalesof50,000amonth,variablecostsofsalesare40,000amonth.Itisestimatedthatifthecreditperiodallowedtoaccountsreceivableweretobeincreasedfrom30daysto60days,salesvolumewouldincreaseby20%.Allcustomerswouldbeexpectedtotakeadvantageoftheextendedcredit.Ifthecostofcapitalis12.5%aistheextensionofthecreditperiodjustifiableinfinancialterms?Solution:Aftercreditextension,accountsreceivable=50000x(1+20%)x2=120000CurrentA/R=50000IncreasedA/R=70000Additionalannualprofits=10000x20%x12=24000Benefits=24000-70000x12.5%=15250So,theextensionofcreditperiodisacceptable.EarlysettlementdiscountsObjectiveshortenthecreditperiods,usemoneymoreefficientandreduceinterestcostAdvantages:Reducingininterestcost,managementcostsPotentialtoreducetheirrecoverabledebtsarisingOffersachoicetocustomersofpaymenttermsDisadvantages:DifficultyinsettingtheappropriatetermsUncertaintyastowhencashreceiptswillbereceived,complicatingcashbudgeting.Unliketoreduceirrecoverabledebtsinpractice.Factoring:TransferthedebtstoafactorandreceivethemoneybeforethedebtThefactoralsoinvolvesinmanagingtheaccountreceivablesoftheFactoring:WithRecourse:factoronlypayscollectabledebtsWithoutrecourse:factorpaysvalueofwholedebtevenifnotrecovered.Advantages:EnhanceliquidityofthecompanySavinginadministrationcostsReductionintheneedformanagementcontrolParticularlyusefulforsmallandfastgrowingbusinesseswherethecreditcontroldepartmentmaynotbeabletokeeppacewithvolumegrowth.Disadvantages:CostoffactoringEndangertradingrelationshipanddamagegoodwill.AsignaloftightliquidityLosecontroloverinternalcreditcontrolsystemHowtoassessfactoring:CostbenefitanalysismethodExample4Acompanyhasmonthlycreditsalesof$200,000,anditgivescustomers60dayscredit.Allcustomerstakethefullcreditallowed.Ithasbaddebtseachyearamountingtoabout2.5%ofsalesturnover.Itoperateswithabankoverdraftandpaysinterestat8%onitsoverdraftbalance.Thecompany’smanagementisconsideringwhethertouseafactortocollectitsdebts,underanon-recoursefactoringarrangement.Afactorhasindicatedthatitwilltakeovertheadministrationofthesalesledgeranddebtcollectionforafeeof2%ofannualcreditsalesturnover.Thiswouldsavethecompanyinternaloperatingcostsof$30,000eachThefactorwouldalsocharge1.5%ofturnoverforcreditinsurance.Thefactorwilladvance80%ofthevalueofinvoicesassoonastheyaresentout,andchargeinterestat7.75%.Iftheservicesofthefactorareused,itisanticipatedthattherewillbenochangeinannualsalesturnoverandnochangeinthecollectionperiodof60days.Required:Assessthefinancialconsequencesofusingthefactorfornon-recoursefactoringandfactorfinance.1CostofexistingpolicyFundingcost=2ｘ$200,000ｘ8%=$32,000Baddebtsloss=12ｘ$200,000ｘ2.5%=$60,000Administrativecost=$30,000costofexistingpolicy=$122,0002CostoffactoringofferingServicecharge=12ｘ$200,000ｘ2%=$48,000advancepaymentcharge=2ｘ$200,000ｘ80%ｘ7.75%=$24,800Fundingcost=2ｘ$200,000ｘ8%ｘ20%=$6,400Creditinsurancecharge=12ｘ$200,000ｘ1.5%=$36,000costoffactoringoffering=$3MakecomparisonNetbenefits=Costofexistingpolicy-Costoffactoringoffering=$122,000-$115,200=$6,800Invoicediscounting(connectwithfactoring)Invoicediscountingisamethodofraisingfinanceagainstthesecurityofdebtorswithoutusingthesalesledgeradministrationservicesofafactor.ManagementinForeignaccountreceivableLettersofcredit:thecustomer’sbankguaranteesitwillpaytheinvoice.ExportfactoringandexportcreditinsuranceInvoicediscounting:saleofselectedinvoicestoadebtfactorBillsofexchange:IOUsignedbythecustomer.Untilpaid,shippingdocumentsthattransferownershiparewithheld;canbesold.（3）Managementofcreditorsandshort-termfinanceSourceofshort-termfinanceTradecreditBankoverdraftShort-termdebtaccountspayablemanagementmayinvolveanalysisofpromptpaymentdiscounts:CostoflowerpayableshigheroverdraftcostsBenefitoflowerpayablesdiscountsCostoftradecreditorEarlypaymentdiscounts(explicitcost)Losssuppliers’goodwill&creditratingproblems(implicitcost)Morestringenttermsforfuturesales.(implicitcost)（4）ManagementofcashWhyholdingcashTransactionsmotivetomeetday-to-dayfinancialobligationsFinancemotivetocovermajoritemslikethepurchaseoffixedassetsandtherepaymentofloans.PrecautionarymotivetogiveabufferagainstunplannedexpenditureInvestmentmotivetotakeadvantageofopportunitiesthatmightariseFactorstobeconsidered:liquidity:Availableforusewhenneeded;safety:Noriskoflossmustbetaken;Profitability:EarnhighestpossibleaftertaxreturnsCashflowforecastsCashpositionAppropriatemanagementactionShort-termsurplusPayaccountspayableearlytoobtaindiscount.IncreasesalesbyincreasingaccountsreceivableandinventoriesMakeshort-terminvestmentsShort-termdeficitIncreaseaccountspayableReduceaccountsreceivableArrangeanoverdraftLong-termsurplusMakelong-terminvestmentsExpandDiversityReplace/updatenon-currentassetsLong-termdeficitIssueofsharecapitalLong-termdebtLeasingSellassetsConsidershutdowninvestmentsCashflowforecastingforJanuary2013JanuaryCashreceiptsSalesreceipts(w1) XIssuesofshares Xcashreceipts XCashpaymentsPurchasepayments(w2) (X)Dividends/taxes (X)(X)Repaymentofloan (X)cashpayments (X)Cashsurplus/deficitformonth XCashbalance,b/f(opening) XCashbalance,c/f(closing) X MethodsofeasingcashshortagePostponingcapitalexpenditureAcceleratingcashinflowswhichwouldothersbeexpectedinalaterperiodReversingpastinvestmentdecisionsbysellingassetspreviouslyacquired.Negotiatingareductionincashoutflows,topostponeorreducepaymentsTreasurymanagementAdvantagesofacentralisedtreasurydepartmentCentralisedliquiditymanagementGivingbetterShort-terminvestmentopportunities–BorrowingarrangedinbulkatlowercostForeignexchangeriskimprovedFundsrequiredforprecautionarypurposeswill