财务和管理的三个方面 [5]
论文作者:www.51lunwen.org论文属性:短文 essay登出时间:2015-09-29编辑:chenyuting点击率:10513
论文字数:3234论文编号:org201509271439274686语种:英语 English地区:英国价格:免费论文
关键词:现金流折现法Reduce Liquidity Problems
摘要:本文主要介绍了公司财务及管理上的几个问题,帮助公司领导者更好地作出决策,管理公司。文章主要分为三个部分:公司财务报告中使用的统一法则,现金流折现法和盈利能力和流动性的重要性。
n huge danger if the firm is unable to meet its short term obligation. Lack of sufficient cash on hand may affect company to lose some incentives from suppliers which will result in higher cost of goods or services. Thus, higher cost will result in less amount of turnover and profit. Therefore, companies always consider liquidity as an important factor and they always try to retain sufficient amount of liquidity. Nevertheless, there is not any standard procedure with regard to company liquidity requirement but mostly it depends on nature of business, location of the business, scale of operation and so on. (Avadhani,V.A. 2010)
Liquidity is one of the major concerns for users while making any sort of deal with the company. Every stakeholder is interested in companies which has higher liquidity. Suppliers will only deal with the company when they know that their money will be received in specified time and the company is able to provide money for their good and services provided. Shareholders are interested in profitability, however they know higher liquidity will give the company the opportunity to get incentives from suppliers which will result in lower cost of goods and services and finally higher profit and dividend or capital gain. Lastly, Bank and other financial institutions always consider companies liquidity position before signing any sort of contract or loan agreement. The liquidity position of a company can easily be understood by looking at it financial statements. Current asset and current liability are the areas which locate the company liquidity position. In order to understand the liquidity position of a company, a number of ratios can be used. These majors are Current Ratio and Quick Ratio. (Singh, Y.P. 2007)
Profitability and its Importance for business survival:
Profitability is the amount of revenue exceed from its relevant expense. Generally both profitability and liquidity are equally important factor for survival of a business. However in the short run a business need to be liquid enough to proceed with its operation but in the long run profitability comes into consideration. Business which are not profitable in the long run will just simply become insolvent. There is an inverse relationship between profitability and liquidity. The higher profitability the less liquid will be the company. This can best described in the following example:
If the asset side of a company balance sheet is arranged in a sequence of liquidity, we will get the following order.
So if we see the above order, as we go from top to bottom the liquidity decreases. However, profitability is totally vice versa. Fixed assets are more profitable for the companies as compare to receivables, securities and cash. Higher liquidity will result in lower risk and lower profit. However, lower liquidity will result in higher risk and higher return. As a result, there is a trade off between profitability and liquidity. Therefore, the role of managers become more dominant to set certain targets which could achieve both partially so that the business can maximize its profit while meeting its obligation successfully.
Working Capital Management to reduce risk of Liquidity problems:
Working capital is the difference between current asset and current liability. And this helps us to understand the position of a company from liquidity point of view. Based on the a
本论文由英语论文网提供整理,提供论文代写,英语论文代写,代写论文,代写英语论文,代写留学生论文,代写英文论文,留学生论文代写相关核心关键词搜索。