Management Strategies Flashcards

1
Q

Cash Flow Management Strategies

A
  1. Distribution of Payments
    - reduce shortages
  2. Discounts for Early Payments
    - increase speed of accounts receivable turnover
  3. Factoring
    - of accounts receivable to increase cash inflows
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2
Q

Working Capital Management Strategies

A
  1. Leasing
    - renting assets owned by another
    - increased/better assets
    - more available cash
  2. Sale and Leaseback
    - cash from sale
  3. Factoring
    - reduces costs of debt collection
    - cash from sale
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3
Q

Profitability Management Strategies

A

COST CONTROLS

  1. Managed Fixed and Variable Costs
    - outsourcing
    - leasing
    - cheaper supplier
    - reduce staff
    - use renewable energy
    - JIT
  2. Cost Centres
  3. Expense Minimisation

REVENUE CONTROLS
1. Marketing Objectives (4 p’s)

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4
Q

Cash Flow Management

A
  • identify inflows (max) and outflows (min)
  • using cash budgets to predict inflows, outflows,
    surpluses and deficits
  • use cash flow statements to detail cash movements
    • monitoring tool
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5
Q

Working Capital Management

A
  • choosing the best combination of CA and CL to meet business objectives

CONTROL OF CURRENT ASSETS

a) managing cash
b) managing debtors (AR)
c) managing stock

CONTROL OF CURRENT LIABILITIES

a) managing creditor (AP)
b) managing loans (short-term)
c) managing bank overdraft

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