Working Capital Management

Question 1

A ____ on liquidity is when receipts lag, creating pressure from the
decreased available funds; a ____ on liquidity is when disbursements are paid too
quickly or trade credit availability is limited, requiring companies to expend funds
before they receive funds from sales that could cover the liability

Answer 1

drag, pull

Question 2

Active strategies can include intentional _______ or _______ the timing of
cash outflows with investment maturities

Answer 2

matching, mismatching

Question 3

A ______ is coordinated with the banking
institution in which customer payments are mailed to a post office box and the banking
institution retrieves and deposits these payments several times a day, enabling the
company to have use of the fund sooner than in a centralized system in which customer
payments are sent to the company.

Answer 3

lockbox system

Question 4

Float factor =

Answer 4

average daily float / average daily deposit

Question 5

_________ are the form of bank line of credit that most companies
refer to as regular lines of credit.

Answer 5

Committed lines of credit

Question 6

what do asset- based loans use as a collateral?

Answer 6

receivables and inventory