Term
| Primary Motivation for outsourcing of jobs |
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Definition
-Save Money on cheaper work
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Term
| What is a lockbox and why do companies use it? |
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Definition
| -speed up the receipt by using the bank to keep checks in the lock box |
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Term
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Definition
-more complex for multinational companies, riskier because gov't differences(expropriation), exchange rate risk, differnce in ability to check other countries credit ratings.
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Term
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Definition
A-commodity(screws, bolts, washers)
B-less available
C-less vendors, higher price, scarcity |
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Term
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Definition
-cash, A/R, inventory
-more important for newer firms |
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Term
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Definition
-cash to cash, pay cash to get it back. Buy inventory->inventory conversion->finished good sales->collect A/R
-want to shorten the cash conversion cycle
-pay for inventory to the receiving of the cash from customer |
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Term
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Definition
| -need to be open to all departments of the company |
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Term
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Definition
-authoring discounts to get customers to pay sooner
-strong firms offer these |
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Term
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Definition
-Transactions
-Precautionary
-Speculative
-Compensating balances(money required to keep in the bank) -help with transaction flow(not used to cover non payment of loans) |
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Term
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Definition
| -more short term money, lower interest rate, riskier |
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Term
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Definition
-more long term money, less risk
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Term
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Definition
| current assets -current liabilities |
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Term
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Definition
| -time from purchase for inventory to paying for them |
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Term
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Definition
| Average Collection Period |
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Term
| if extra money you should |
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Definition
-safe, short term
-do not put them in risky, long term investments |
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Term
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Definition
| -allowing trusted customers to be paid automatically by bank for service |
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Term
| Red line method of inventory |
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Definition
| -reorder when amounts get too low |
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Term
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Definition
| Float when checks are mailed out but have not been cashed |
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Term
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Definition
The amount of checks that have been received and deposited but have not yet been made available to the account in which they were deposited. |
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Term
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Definition
the difference between the balance shown in the checkbook and the balance shown on the bank’s books. |
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Term
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Definition
| -sold in shorter period, Near market value |
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Term
| Keep this amount to help bank with expenses |
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Definition
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Term
| Cash conversion cycle in US versus Europe |
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Definition
| -Europe is about twice as long because ability to have closer relationship with bank |
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Term
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Definition
| different time periods for payment |
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Term
precautionary held for unforeseen
speculative for a bargain |
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Definition
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Term
| length of time convert receivables |
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Definition
| -Days sales outstanding/Average collection period |
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