Questions from Financial Management

Q: What are the negative consequences of a company holding too much cash

What are the negative consequences of a company holding too much cash?

Q: Explain the factors affecting the choice of a maximum cash balance amount

Explain the factors affecting the choice of a maximum cash balance amount.

Q: What is the difference between pro forma financial statements and a cash

What is the difference between pro forma financial statements and a cash budget? Explain why pro forma financial statements are not used to forecast cash needs.

Q: What are the benefits of “collecting early” and how do

What are the benefits of “collecting early” and how do companies attempt to do this?

Q: What are the benefits of “paying late” (but not

What are the benefits of “paying late” (but not too late) and how do companies attempt to do this?

Q: How does accounts receivable factoring work? What are the benefits to

How does accounts receivable factoring work? What are the benefits to the two parties involved? What are the risks?

Q: What is an agent? What are the responsibilities of an agent

What is an agent? What are the responsibilities of an agent?

Q: Accounts receivable are sometimes not collected. Why do companies extend trade

Accounts receivable are sometimes not collected. Why do companies extend trade credit when they could insist on cash for all sales?

Q: Inventory is sometimes thought of as a necessary evil. Explain.

Inventory is sometimes thought of as a necessary evil. Explain.

Q: What are the primary variables being balanced in the EOQ inventory model

What are the primary variables being balanced in the EOQ inventory model? Explain