(BQ) Part 2 book "Corporate financial management" has contents: Stock market efficiency, value based management, value based management, the cost of capital, valuing shares, capital structure, capital structure,.and other contents. | CHAPTER 12 Short- and medium-term finance, treasury and working capital management Learning outcomes This chapter starts by concentrating on a description of the main forms of short- and medium-term finance available, but then goes further to explore the appropriate use of these sources in varying circumstances. Once obtained, cash and other short-term assets need to be carefully managed to achieve the appropriate balance in terms of returns and risk. This is one of the key components of treasury management; we also briefly look at the others. We then widen the focus to include a variety of practices to achieve good management of working capital. Specifically the reader should be able to: n describe, compare and contrast the bank overdraft, the bank term loan, trade credit, factoring, hire purchase, leasing, bills of exchange and acceptance credits as ways of financing the firm; n describe the main roles of a treasury department and how the treasurer might reduce risk and enhance the mix of finance for the firm; n discuss the factors influencing the balance of the different types of debt in terms of maturity, currency and interest rates; n show awareness of the central importance of good working capital management, including debtors (accounts receivable) management, the cash conversion cycle, cash management, inventory management and the investment of temporary surplus funds. Complete your diagnostic test for Chapter 12 now to create your personal study plan 475 12/07/2012 09:37 4 76 Part 4 • Sources of finance Introduction Short-term and medium-term finance is presented in this textbook as the third major category of funding. This is not meant to imply that the forms of finance described in this chapter are any less important than the first two (equity and long-term debt finance). Indeed, for many firms, especially smaller ones, a combination of overdrafts and loans, trade credit, leasing and hire purchase make .
