- CFA Exams
- Dec. 2020 Level 1
- Study Session 11. Corporate Finance II
- Reading 35. Working Capital Management
Reading 35. Working Capital Management
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Learning Outcome Statements
| Reading 35. Working Capital Management | |
|---|---|
| 1. Managing and Measuring Liquidity a. describe primary and secondary sources of liquidity and factors that influence a company's liquidity position; b. compare a company's liquidity measures with those of peer companies; c. evaluate working capital effectiveness of a company based on its operating and cash conversion cycles and compare the company's effectiveness with that of peer companies; | |
| 2. Managing the Cash Position d. describe how different types of cash flows affect a company's net daily cash position; | |
| 3. Investing Short-Term Funds e. calculate and interpret comparable yields on various securities, compare portfolio returns against a standard benchmark, and evaluate a company's short-term investment policy guidelines; | |
| 4. Evaluating Accounts Receivable, Inventory and Accounts Payable Management f. evaluate a company's management of accounts receivable, inventory, and accounts payable over time and compared to peer companies; | |
| 5. Managing Short-Term Financing g. evaluate the choices of short-term funding available to a company and recommend a financing method. |