Weekly Finance Tips

Archive for the ‘Capital Management’ Category

Definition of ‘Asset Management’
1. The management of a client’s investments by a financial services company, usually an investment bank. The company will invest on behalf of its clients and give them access to a wide range of traditional and alternative product offerings that would not be to the average investor.

2. An account at a financial institution that includes checking services, credit cards, debit cards, margin loans, the automatic sweep of cash balances into a money market fund, as well as brokerage services.

Also known as an “asset management account” or a “central asset account”.

explains ‘Asset Management’
1. The expense of this service generally restricts it to high net-worth individuals, governments, corporations and financial intermediaries. This includes such products as equity, fixed income, real estate, agriculture and international investments.

2. When individuals deposit money into the account, it is placed into a money market fund that offers a greater return that can be found in regular savings and checking accounts. The added benefit to individuals is that they can do all of their banking and investing at the same institution instead of having a bank and brokerage account at two different companies.

These types of accounts came about with the passing of the Gramm-Leach-Bliley Act in 1997, which replaced the Glass-Steagall Act. The Glass-Steagall Act was created during the Great Depression and did not allow financial institutions to offer both banking and security services.

Definition of ‘Working Capital Turnover’
A measurement comparing the depletion of working capital to the generation of sales over a given period. This provides some useful information as to how effectively a company is using its working capital to generate sales.

Working Capital Turnover

explains ‘Working Capital Turnover’
A company uses working capital (current assets – current liabilities) to fund operations and purchase inventory. These operations and inventory are then converted into sales revenue for the company. The working capital turnover ratio is used to analyze the relationship between the money used to fund operations and the sales generated from these operations. In a general sense, the higher the working capital turnover, the better because it means that the company is generating a lot of sales compared to the money it uses to fund the sales.

For example, if a company has current assets of $10 million and current liabilities of $9 million, its working capital is $1 million. When compared to sales of $15 million, the working capital turnover ratio for the period is 15 ($15M/$1M). When used in fundamental analysis, this ratio can be compared to that of similar companies or to the company’s own historical working capital turnovers.

Definition of ‘Working Capital’
A measure of both a company’s efficiency and its short-term financial health. The working capital ratio is calculated as:

Working Capital

Positive working capital means that the company is able to pay off its short-term liabilities. Negative working capital means that a company currently is unable to meet its short-term liabilities with its current assets (cash, accounts receivable and inventory).

Also known as “net working capital”, or the “working capital ratio”.
explains ‘Working Capital’
If a company’s current assets do not exceed its current liabilities, then it may run into trouble paying back creditors in the short term. The worst-case scenario is bankruptcy. A declining working capital ratio over a longer time period could also be a red flag that warrants further analysis. For example, it could be that the company’s sales volumes are decreasing and, as a result, its accounts receivables number continues to get smaller and smaller.

Working capital also gives investors an idea of the company’s underlying operational efficiency. Money that is tied up in inventory or money that customers still owe to the company cannot be used to pay off any of the company’s obligations. So, if a company is not operating in the most efficient manner (slow collection), it will show up as an increase in the working capital. This can be seen by comparing the working capital from one period to another; slow collection may signal an underlying problem in the company’s operations.

Definition of ‘Current Assets’
1. A balance sheet account that represents the value of all assets that are reasonably expected to be converted into cash within one year in the normal course of business. Current assets include cash, accounts receivable, inventory, marketable securities, prepaid expenses and other liquid assets that can be readily converted to cash.

2. In personal finance, current assets are all assets that a person can readily convert to cash to pay outstanding debts and cover liabilities without having to sell fixed assets.

In the United Kingdom, current assets are also known as “current accounts”.

explains ‘Current Assets’
1. Current assets are important to businesses because they are the assets that are used to fund day-to-day operations and pay ongoing expenses. Depending on the nature of the business, current assets can range from barrels of crude oil, to baked goods, to foreign currency.

2. In personal finance, current assets include cash on hand and in the bank, and marketable securities that are not tied up in long-term investments. In other words, current assets are anything of value that is highly liquid.

Marketing strategies are concentrated (concentrated marketing)

Unlike the marketing strategy that differentiates according to the needs of consumers, concentrated marketing focus to market their products only to one or several groups of buyers only. So the marketing of products intended only to groups with the most potential buyers. As products Tropicana Slim, low-calorie and sugar-free sugar is more focused on consumers who want to maintain their health, especially for people with diabetes.

With a focus on specific groups, companies who use this marketing strategy of trying to offer the best products for their target market. So that the image specification products offered can be embedded in the target market of consumers. In addition it also concentrated marketing savings, both production costs, distribution costs and promotional costs. Because everything is just focus on one or two groups of consumers only.

But there are also weaknesses of the marketing concentration, the risk is even greater than without differentiating marketing and marketing with a differentiators. If the target market is the focus of marketing arrived – arrived switch to a competitor with a similar focus, then you will lose one – the only field of consumer that you have. Magnitude of the risk, make business owners prefer to market their products to multiple target markets.

For those of you who want to try a new business opportunity, you should first determine the target market you want to reach. The clearer your target market, the more easily you determine the business development strategy. Hopefully useful and successful greeting.

I implemented a new practical solution that was right in front of me — a kitchen timer. This is a writing trick that I learned to help keep myself on task and focused; you see how much you can within a 30 minute time limit. These are the new ground rules I use to manage time and the issues list:

• The issues list is sorted by Priority and Next Review date, so the project team can focus on the immediate issues impacting the project.Each issue gets a three-minute time limit for discussion. I suggest using a kitchen timer or a stopwatch to keep track of time.
• Team members need to quickly and succinctly communicate a description of the issue, actions in-progress to resolve the issue, and where the team member needs help.
• If the team member exceeds the time limit, it’s encouraged that an additional conversation take place after the meeting.
• This approach has helped reduce the number of tangent discussions and keep the team focused on the specific agenda item. If you don’t want to use a kitchen timer, use the stopwatch function on your iPhone or download a stopwatch application for your smartphone.

By clarifying your expectations for the issues review meeting, you will find that you’ll quickly cover your agenda items. Also, by sorting the issues list by priority and next review date, you get an immediate list of issues that need resolution rather than reviewing issues that have an impact later on in the project.

A Scrum-based approach using a daily stand up meeting will also help communicate issues throughout the week. Issue management and resolution should occur throughout the week and not just at the formal issue review meeting. If you have more than 10 open issues on your issues list, you should consider shortening the discussion time, prioritizing the list further, or expanding the meeting’s duration.

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