财务管理总结 英文(2)

Coefficient of Variation（变化系数）The ratio of the standard deviation of a distribution to the mean of that distribution. Systematic Risk

Risk factors that affect a large number of assets

Also known as non-diversifiable risk or market risk

Includes such things as changes in GDP, inflation, interest rates, etc. Unsystematic Risk

Risk factors that affect a limited number of assets

Also known as unique risk and asset-specific risk

Includes such things as labor strikes, part shortages, etc.

Systematic Risk Principle

There is a reward for bearing risk

There is not a reward for bearing risk unnecessarily

The expected return on a risky asset depends only on that asset’s systematic risk since unsystematic risk can be diversified away Total Risk

Total risk = systematic risk + unsystematic risk

The standard deviation of returns is a measure of total risk

For well diversified portfolios, unsystematic risk is very small

Consequently, the total risk for a diversified portfolio is essentially equivalent to the systematic risk

Returns

Total Return = expected return + unexpected return

Unexpected return = systematic portion + unsystematic portion

Therefore, total return can be expressed as follows:

Total Return = expected return + systematic portion + unsystematic portion

Expected versus Unexpected Returns

Realized returns are generally not equal to expected returns

There is the expected component and the unexpected component

At any point in time, the unexpected return can be either positive or negative

Over time, the average of the unexpected component is zero Portfolios(组合）

A portfolio is a collection of assets

An asset’s risk and return is important in how it affects the risk and return of the portfolio The risk-return trade-off for a portfolio is measured by the portfolio expected return and standard deviation, just as with individual assets

CAPM Assumptions

1. Capital markets are efficient.

2. Homogeneous investor expectations over a given period.

3. Risk-free asset return is certain (use short- to intermediate-term Treasuries as a proxy).

4. Market portfolio contains only systematic risk (use S&P 500 Index or similar as a proxy).

Beta: An index of systematic risk.

It measures the sensitivity of a stock’s returns

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to changes in returns on the market portfolio.

Net Working Capital（净营运资本） Current Assets - Current Liabilities. Gross Working Capital（毛营运资本） The firm’s investment in current assets. Working Capital Management

The administration of the firm’s current assets and the financing needed to support current assets.

Speeding Up Cash Receipts

Expedite preparing and mailing the invoice Accelerate the mailing of payments from customers

Reduce the time during which payments received by the firm remain uncollected S-l-o-w-i-n-g D-o-w-n Cash Payouts 1.“Playing the Float”

2.Control of Disbursements Payable through Draft

Payroll and Dividend Disbursements Zero Balance Account (ZBA)

3.Remote and Controlled Disbursing Common Money Market Instruments Money Market Instruments

All government securities and short-term corporate obligations. (Broadly defined)

Treasury Bills (T-bills): Short-term, non-interest bearing obligations of the U.S. Treasury issued at a discount and redeemed at maturity for full face value. Minimum $1,000 amount and $1,000 increments thereafter.

Treasury Notes: Medium-term (2-10 years’ original maturity) obligations of the U.S. Treasury.

Treasury Bonds: Long-term (more than 10 years’ original maturity) obligations of the U.S. Treasury.

Costs arising from relaxing credit standards A larger credit department Additional clerical work

Servicing additional accounts Bad-debt losses Opportunity costs

Analyzing the Credit Applicant

Obtaining information on the credit applicant Analyzing this information to determine the applicant’s creditworthiness Making the credit decision Sources of Information

The company must weigh the amount of information needed versus the time and expense required. Financial statements Credit ratings and reports Bank checking Trade checking

Company’s own experience Credit Analysis

A credit analyst is likely to utilize information regarding:

the financial statements of the firm (ratio analysis)

the character of the company the character of management the financial strength of the firm

other individual issues specific to the firm Inventories form a link between production and sale of a product. Inventory types:

Raw-materials inventory Work-in-process inventory In-transit inventory

Finished-goods inventory

Inventories provide flexibility for the firm in: Purchasing

Production scheduling

Efficient servicing of customer demands

Capital Rationing occurs when a constraint (or budget ceiling) is placed on the total size of capital expenditures during a particular period. Dependent -- A project whose acceptance depends on the acceptance of one or more other projects.

Mutually Exclusive -- A project whose acceptance precludes the acceptance of one or

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more alternative projects.

Interpretation of the DOL

Key Conclusions to be Drawn from the previous slide and our Discussion of DOL DOL is a quantitative measure of the “sensitivity” of a firm’s operating profit to a change in the firm’s sales.

The closer that a firm operates to its break-even point, the higher is the absolute value of its DOL.

When comparing firms, the firm with the highest DOL is the firm that will be most “sensitive” to a change in sales.

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