Estimating Financing Needs

The following post has two assignments namely;

1.Estimating Financing Needs

study how to manage working capital to achieve optimal levels of cash, marketable securities, accounts receivable, and inventories. You will also examine how a firm plans for the future by using forecasted financial figures and financial statements for purposes of determining short-term financing needs. • Analyze the impact of working capital management components on organizational decisions • Evaluate methods of forecasting debt financing requirements • Analyze excess capacity adjustments to the AFN equation and the projected financial statement methods based on the key determinants of external fund requirements Working Capital Management Working capital management involves prudently managing inventories, accounts receivable and payable, and cash to satisfy both maturing short-term debt and upcoming operational expenses. Close to 50 percent of the typical industrial and retail firm’s assets are held as working capital. Many newly minted college graduates work in positions that focus on working capital management, particularly in small businesses where most new jobs are created in this economy. Why do companies hold cash? Liquidity is the primary reason. Cash is important when emergencies or unknown events arise causing the need for a quick purchase. In addition, special opportunities will arise from time-to-time that when capitalized on quickly will help the firm financially. For example, purchasing extra inventory at a significant discount when warehouse space is available to fill future orders would be a great use for cash. The goal for accounts receivable management is to obtain payment for goods and services as quickly as possible. Companies that make sales on credit are able to decrease the amount of time that their customers wait until they pay the firm by offering discounts. For example, credit sales are often made with terms such as 2/10 net 30. The first part of the credit sales term, “2/10,” means that when the customers pay for sales within 10 days, they receive a 2% discount on the sale. The remainder of the term, “net 30,” means that the bill is due within 30 days. By offering such an incentive, firms are able to induce their customers to pay off their bills early which, in turn, helps firms pay their bills on time and perhaps even helps them to take advantage of similar supplier discounts.

2.Human Error Aviation Accident Analysis

What is Heinrich's Pyramid? Heinrich's Pyramid is the way Heinrich’s law is usually depicted. Heinrich’s Law deals with accidents in general and not specifically to aviation. The law states that “in a workplace, for every accident that causes a major injury, there are 29 accidents that cause minor injuries and 300 accidents that cause no injuries.” Heinrich suggest that if people try to cut down on a lot of the minor incidences can in return cut down on major incidences. Even though the law makes since it is not exactly how major and minor accidents relate.