Csh Mgmt Formulas

Question 1

AR Mgmt (4)

Answer 1

AR TO in Days = Daily Sales * DSiR

Chg in AR = Chnge in VC - (Chg in avg Collection Period/Days in Yr)

CoChg in AR = Chg in AR (opp cost)

Benefit / Loss from Change = CM - CoChng in AR

Question 2

Inventory Mgmt

Answer 2

EOQ = Sqrt 2(FC * Dmd)/carry cost

inv cost = pc + oc + cc + s.stk

reorder point = (avg time demand * Lead time) + Safety stock

Safety Stock = Exp Stk out + carry cost

Question 3

Cash Mgmt (2)

Answer 3

EOQ

^inc cash collection = Daily cr Sales * Red Flt * Opp cost

Question 4

Short-term Fin. (5,9)

Answer 4

Cost of not taking Discount

Simple Loan (SL)

• SL Amt
• IE
• Eff Rate

Discount Loan (DL)

• DL
• Eff Rate

Comp Bal Loan (CBL)

• CBL
• Eff Rate

LoC Cost