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Working Capital Management and Investment Evaluation and Capital Budgeting…
Working Capital Management and Investment Evaluation and Capital Budgeting
Working Capital Management
Working Capital
• Definition: Current assets – Current liabilities
• Operating cycle: Inventory → Sales → Accounts receivable → Cash
• Goal: Balance between liquidity and profitability
Accounts Receivable
• Credit policies
• Monitoring and collection
• Indicators: Turnover, average collection period
• Risks: Bad debts, value loss in inflationary contexts
Inventory
• Models: Reorder point, Just in Time
• ABC classification
• Technology: ERP, demand analysis
• Risks: Shortage vs. excess
Cash and Marketable Securities
• Cash flow projections
• Cash conversion cycle
• Investment in liquid instruments
• Internal controls and cash policies
Short-Term Financing
• Bank loans, promissory notes, factoring
• Accounts payable as spontaneous financing
• Risks: Dependency, high costs
Investment Evaluation and Capital Budgeting
Relevant Cash Flow
• Incremental flows
• Exclusion of sunk costs
• Residual value and tax benefits
Evaluation Methods
• NPV: Value creation
• IRR: Percentage return
• Payback Period: Recovery time
• PI: Relative efficiency
Risk Analysis
• Sensitivity: One-variable variation
• Scenarios: Optimistic, probable, pessimistic
• Visual tools for decision-making
Long-Term Project Valuation
• Extended flows + residual value
• WACC and Modified IRR
• Strategic analysis: Synergies, positioning
• Advanced techniques: Monte Carlo, real options
Yodalys Calles
6-715-2205
