Management and Organizational Studies 2310A/B Lecture Notes - Lecture 4: Accounts Payable, Accounts Receivable, Current Liability

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

Document Summary

18. 2 the operating cycle and the cash cycle. Examples: increasing long-term debt, equity or current liabilities, decreasing current assets other than cash or fixed assets, borrow long-term, sell some stock, get a 90-day loan, sell some inventory, sell some property. Decreasing long-term debt, equity or current liabilities. Increasing current assets other than cash or fixed assets. Statement of change in financial position identity (rearranged) equity. Net working capital + fixed assets = long-term debt + Net working capital = cash + other ca cl. Cash = long-term debt + equity + current liabilities current assets other than cash fixed assets. Day 0, you purchase ,000 worth of inventory on credit. You pay the bill 30 days later, after 30 more days; someone buys the. Your buyer does not actually pay for another 45 days. + ,400: time between purchasing the inventory and collecting the cash (105 days) Inventory period time required to purchase and sell the inventory (60 days)