Management and Organizational Studies 2310A/B Midterm: MOS 2310-CHAPTER 18

• School: Western University
• Department: Management and Organizational Studies
• Course: Management and Organizational Studies 2310A/B
• Professor: Jun Wang

Document Summary

Current assets are cash and other assets expected to be converted to it within a year, and are presented in order of liquidity on balance sheet. 4 most important current assets in order of liquidity: cash, marketable securities, 3 main current liabilities: a/p, expenses payable (including accrued wages and taxes), and notes payable. Cash=long-term debt+equity+current liabilities-current assets (other than cash)-fixed assets. Decreasing current assets other than cash (selling inventory) 18. 2 the operating cycle and the cash cycle. Decreasing current liabilities (paying off a 90-day loan) Primary concern in short-term finance is the firm"s short run operating and financing activities. For a typical manufacturing firm, these short-run activities consists of these events and decisions. Cash flows are unsynchronized (ex. payment of cash for raw materials does not happen at the same time as the recipt of cash from selling the product) and uncertain (cannot predict precisely future sales and costs).