1. What's the opportunity cost of cash balances to a firm?
2. What is the danger of excessive liquidity?
3. What are the costs and benefits of stringent credit collection policies?
4. How is inventory turnover impacted by just-in-time?
5. Why, traditionally, was it recommended to take cash discounts on purchases?
6. What is meant by aging of accounts receivables, and how can it be usefully applied?
7. What is the biggest obstacle in forecasting a firm's future financial performance and how can financial statements help?
1. Opportunity cost of cash balance to the firm is referred to the return the firm can earn if the same cash is invested in the market place securities. So the opportunity cost of holding cash balance will be equal to the market rate of return. The minimum opportunity cost of holding cash equals to the return from treasury bills.
2. Excessive liquidity may lead to bankruptcy. If a firm has excess liquidity and due unexpected unfavorable market condition cash inflow drops down, it becomes difficult for the firm to repay the ...
The solution examines opportunity cost of cash balances and excessive liquidity for stringent credit collection.
Technical Knowledge of Accounting
Please provide help with the following questions:
You and your small group have been asked to create an informative slide presentation to managers, most of whom do not have a technical knowledge of accounting.
1. First, you will discuss key elements with top executives.
2, How will investors assess the stability of our company?
3. What are the key financial ratios that measure the stability of an organization?
4. Define stability.
Use financial ratio analysis to assess the stability of an organization.
Use effective communication techniques.
The student should understand why stability of an organization is important and what is meant by 'stability'. The student should also demonstrate an understanding of the key ratios which measure stability.View Full Posting Details