Lorenzo Preve and Virginia Sarria-Allende
- Published in print:
- 2010
- Published Online:
- May 2010
- ISBN:
- 9780199737413
- eISBN:
- 9780199775637
- Item type:
- book
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199737413.001.0001
- Subject:
- Economics and Finance, Financial Economics
Working capital management is one of the most important topics in corporate finance: it relates to the operating investment of a firm and the way managers choose to finance it. This topic, mostly ...
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Working capital management is one of the most important topics in corporate finance: it relates to the operating investment of a firm and the way managers choose to finance it. This topic, mostly ignored by academics for years, is now gaining importance as we realize that financial markets are not as efficient as they were assumed to be, especially as firms expand outside the developed economies. This book provides a general framework that helps to understand working capital in a comprehensive approach, linking operating decisions to their financial implications and to the overall business strategy.Less
Working capital management is one of the most important topics in corporate finance: it relates to the operating investment of a firm and the way managers choose to finance it. This topic, mostly ignored by academics for years, is now gaining importance as we realize that financial markets are not as efficient as they were assumed to be, especially as firms expand outside the developed economies. This book provides a general framework that helps to understand working capital in a comprehensive approach, linking operating decisions to their financial implications and to the overall business strategy.
Lorenzo A. Preve and Virginia Sarria-Allende
- Published in print:
- 2010
- Published Online:
- May 2010
- ISBN:
- 9780199737413
- eISBN:
- 9780199775637
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199737413.003.0004
- Subject:
- Economics and Finance, Financial Economics
In this chapter, we introduce the most commonly used ratios, classified according to four broad categories that are fairly standardized; in particular, we can organize a firm's financial statement ...
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In this chapter, we introduce the most commonly used ratios, classified according to four broad categories that are fairly standardized; in particular, we can organize a firm's financial statement information into ratios to examine the firm's profitability, liquidity, operating efficiency, and financial leverage. We start by analyzing the way these ratios are built and how they should be interpreted. Next, we consider some other ratios, based on market data. Finally, we discuss how to realize a comprehensive financial analysis of a firm using these ratios.Less
In this chapter, we introduce the most commonly used ratios, classified according to four broad categories that are fairly standardized; in particular, we can organize a firm's financial statement information into ratios to examine the firm's profitability, liquidity, operating efficiency, and financial leverage. We start by analyzing the way these ratios are built and how they should be interpreted. Next, we consider some other ratios, based on market data. Finally, we discuss how to realize a comprehensive financial analysis of a firm using these ratios.
Lorenzo A. Preve and Virginia Sarria-Allende
- Published in print:
- 2010
- Published Online:
- May 2010
- ISBN:
- 9780199737413
- eISBN:
- 9780199775637
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199737413.003.0001
- Subject:
- Economics and Finance, Financial Economics
We start the chapter by presenting a basic framework of corporate finance. Next, we provide an introduction to the main financial reports: the balance sheet and the income statement. We describe both ...
More
We start the chapter by presenting a basic framework of corporate finance. Next, we provide an introduction to the main financial reports: the balance sheet and the income statement. We describe both the primary individual characteristics of each financial report and the interaction between the two statements. This interaction is important as it allows one to get a more complete picture of a company's financial situation and business performance. Finally, we provide some basic measures of return. As a necessary complement, we also introduce the concepts of expected return and cost of capital.Less
We start the chapter by presenting a basic framework of corporate finance. Next, we provide an introduction to the main financial reports: the balance sheet and the income statement. We describe both the primary individual characteristics of each financial report and the interaction between the two statements. This interaction is important as it allows one to get a more complete picture of a company's financial situation and business performance. Finally, we provide some basic measures of return. As a necessary complement, we also introduce the concepts of expected return and cost of capital.
Lorenzo A. Preve and Virginia Sarria-Allende
- Published in print:
- 2010
- Published Online:
- May 2010
- ISBN:
- 9780199737413
- eISBN:
- 9780199775637
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199737413.003.0002
- Subject:
- Economics and Finance, Financial Economics
This chapter develops a useful definition and interpretation of working capital. We argue about the limitations of the standard definition, and suggest that by introducing a second, complementary ...
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This chapter develops a useful definition and interpretation of working capital. We argue about the limitations of the standard definition, and suggest that by introducing a second, complementary concept, financial needs for operation (FNOs), a more comprehensive understanding of working capital can be achieved. A firm's FNOs are the level of operating investment needed for the company to operate its business. This investment can be financed using working capital and/or short‐term financial debt. Selecting the mix between these two is among the firm's most important strategic business decisions; therefore, the consideration of working capital in isolation will usually lead the manager astray.Less
This chapter develops a useful definition and interpretation of working capital. We argue about the limitations of the standard definition, and suggest that by introducing a second, complementary concept, financial needs for operation (FNOs), a more comprehensive understanding of working capital can be achieved. A firm's FNOs are the level of operating investment needed for the company to operate its business. This investment can be financed using working capital and/or short‐term financial debt. Selecting the mix between these two is among the firm's most important strategic business decisions; therefore, the consideration of working capital in isolation will usually lead the manager astray.
Lorenzo A. Preve and Virginia Sarria-Allende
- Published in print:
- 2010
- Published Online:
- May 2010
- ISBN:
- 9780199737413
- eISBN:
- 9780199775637
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199737413.003.0003
- Subject:
- Economics and Finance, Financial Economics
In this chapter, we address the question of how a firm should finance its operation. More specifically, the chapter aims to help managers gain a better understanding of the relation between a firm's ...
More
In this chapter, we address the question of how a firm should finance its operation. More specifically, the chapter aims to help managers gain a better understanding of the relation between a firm's level of operating activity and working capital. Given that, from a managerial perspective, a certain portion of short‐term operating assets is to be considered long term, firms should select an accurate share of long‐term financing to ensure matching financing maturity to assets' average life. The chapter presents how the optimal financing choice is influenced by seasonality and growth.Less
In this chapter, we address the question of how a firm should finance its operation. More specifically, the chapter aims to help managers gain a better understanding of the relation between a firm's level of operating activity and working capital. Given that, from a managerial perspective, a certain portion of short‐term operating assets is to be considered long term, firms should select an accurate share of long‐term financing to ensure matching financing maturity to assets' average life. The chapter presents how the optimal financing choice is influenced by seasonality and growth.
M. Ramachandran
- Published in print:
- 2011
- Published Online:
- September 2012
- ISBN:
- 9780198073987
- eISBN:
- 9780199080847
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780198073987.003.0004
- Subject:
- Sociology, Urban and Rural Studies
This chapter discusses the development of the metro rail system in Bangalore. It discusses the technical, financial, and scheduling aspects of the Bangalore metro proposal, as also its ...
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This chapter discusses the development of the metro rail system in Bangalore. It discusses the technical, financial, and scheduling aspects of the Bangalore metro proposal, as also its implementation. It focuses on four important stages of project planning — identification, preparation, appraisal, and implementation — and critically appraises the Bangalore metro rail project, drawing important lessons in the process.Less
This chapter discusses the development of the metro rail system in Bangalore. It discusses the technical, financial, and scheduling aspects of the Bangalore metro proposal, as also its implementation. It focuses on four important stages of project planning — identification, preparation, appraisal, and implementation — and critically appraises the Bangalore metro rail project, drawing important lessons in the process.
Stefan Leins
- Published in print:
- 2018
- Published Online:
- September 2018
- ISBN:
- 9780226523392
- eISBN:
- 9780226523569
- Item type:
- book
- Publisher:
- University of Chicago Press
- DOI:
- 10.7208/chicago/9780226523569.001.0001
- Subject:
- Anthropology, Social and Cultural Anthropology
Why do financial analysts exist in the market? Stories of Capitalism seeks to find an anthropological explanation to a question economists have failed to answer. Building on recent developments in ...
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Why do financial analysts exist in the market? Stories of Capitalism seeks to find an anthropological explanation to a question economists have failed to answer. Building on recent developments in anthropology and the social studies of finance, it provides the first full-scale ethnography on financial analysts and their market practices. Drawing on 24 months of fieldwork, Stories of Capitalism looks at financial analysis from three different angles. First, it describes financial analysts as a sub-professional group and focuses on how they differentiate themselves from other bankers to become accepted as a group of experts. Second, it looks at the everyday valuation and forecasting practices of analysts and illustrates how calculative practices, culturally embedded interpretations and social interaction are combined to produce persuasive forecasts. Third, it focuses on the organizational role of financial analysts and shows how they gain influence when interacting with wealth managers and clients. Based on these three empirical parts, Stories of Capitalism illustrates that through processes of differentiation, the performance of expertise, and the creation and circulation of narratives, financial analysts become meaningful actors in the market. Their role in the market is not based on their ability to predict the future, but on their ability to create and circulate narratives that frame financial market movements as meaningful and assessable.Less
Why do financial analysts exist in the market? Stories of Capitalism seeks to find an anthropological explanation to a question economists have failed to answer. Building on recent developments in anthropology and the social studies of finance, it provides the first full-scale ethnography on financial analysts and their market practices. Drawing on 24 months of fieldwork, Stories of Capitalism looks at financial analysis from three different angles. First, it describes financial analysts as a sub-professional group and focuses on how they differentiate themselves from other bankers to become accepted as a group of experts. Second, it looks at the everyday valuation and forecasting practices of analysts and illustrates how calculative practices, culturally embedded interpretations and social interaction are combined to produce persuasive forecasts. Third, it focuses on the organizational role of financial analysts and shows how they gain influence when interacting with wealth managers and clients. Based on these three empirical parts, Stories of Capitalism illustrates that through processes of differentiation, the performance of expertise, and the creation and circulation of narratives, financial analysts become meaningful actors in the market. Their role in the market is not based on their ability to predict the future, but on their ability to create and circulate narratives that frame financial market movements as meaningful and assessable.
Hrishikes Bhattacharya
- Published in print:
- 2011
- Published Online:
- September 2012
- ISBN:
- 9780198074106
- eISBN:
- 9780199080861
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780198074106.003.0018
- Subject:
- Economics and Finance, Financial Economics
This chapter applies some of the techniques presented in earlier chapters in order to make a comprehensive analysis of a project, from the perspective of a bank when it is expected to finance both ...
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This chapter applies some of the techniques presented in earlier chapters in order to make a comprehensive analysis of a project, from the perspective of a bank when it is expected to finance both its term loan and working capital loan requirements. Using the case of a project proposal, received by the manager of a branch of a nationalised bank located in a jute growing area, this chapter illustrates the methods of project appraisal.Less
This chapter applies some of the techniques presented in earlier chapters in order to make a comprehensive analysis of a project, from the perspective of a bank when it is expected to finance both its term loan and working capital loan requirements. Using the case of a project proposal, received by the manager of a branch of a nationalised bank located in a jute growing area, this chapter illustrates the methods of project appraisal.
Óscar Dancourt and Renzo Jiménez Sotelo
- Published in print:
- 2018
- Published Online:
- November 2018
- ISBN:
- 9780198827948
- eISBN:
- 9780191866630
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/oso/9780198827948.003.0008
- Subject:
- Economics and Finance, Financial Economics, Development, Growth, and Environmental
This chapter analyses the case of state-owned financial entities in Peru and argues that their development banking activities have decreased in importance as instruments of public policy since the ...
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This chapter analyses the case of state-owned financial entities in Peru and argues that their development banking activities have decreased in importance as instruments of public policy since the structural reforms implemented in the early 1990s. Like all other state enterprises, they have since been subject to discriminatory legal regulation. The four state financial companies analysed have objectives and goals that are not integrated with one other, duplicate their efforts, and do not take advantage of the possible synergies to be obtained. Therefore, none of these institutions constitutes an effective state development bank such as exists in other countries.Less
This chapter analyses the case of state-owned financial entities in Peru and argues that their development banking activities have decreased in importance as instruments of public policy since the structural reforms implemented in the early 1990s. Like all other state enterprises, they have since been subject to discriminatory legal regulation. The four state financial companies analysed have objectives and goals that are not integrated with one other, duplicate their efforts, and do not take advantage of the possible synergies to be obtained. Therefore, none of these institutions constitutes an effective state development bank such as exists in other countries.
