This can also be described as the need to maintain liquidity, or solvency of the company: a company needs to have the funds available that will enable it to stay in business. This module introduces some of the ways in which companies achieve this, specifically looking at financing, mobilisation of cash and cash investment.
The timing mismatch
- Financing Time Horizon
Short-term – Medium-term – Long-term
- Short-Term Financing Methods
Bank overdraft – Credit facilities
- Cost of Short-Term Borrowings
Bank account interest – Simple interest on loans
- Investment Choices
Deposit – Money market funds (MMFs) – Commercial paper – Certificate of deposit – Treasury bills – Repurchase Agreements
- Cash Investment
Working capital – Core cash – Long-term cash – Outsourcing investment – Calculating returns on cash investment
Complete our bespoke exercises to benchmark your knowledge
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