📖 营运资本管理

Corporate Finance

I. Lesson Focus

This lesson examines the management of current assets and current liabilities. Candidates must be able to define net working capital, calculate and interpret liquidity and operating cycle ratios (including the cash conversion cycle), compare conservative versus aggressive working-capital policies, evaluate the cost of trade credit, and identify the relative costs and risks of major short-term financing instruments.

II. The Problem

A manufacturing firm with annual sales of RMB 200 million suffers from excessive inventory buildup, a 65-day receivables collection period, and supplier terms requiring payment within 30 days. The firm frequently runs negative cash balances and relies on expensive short-term bank loans. Management needs to know how to optimize working capital to maintain operating continuity while lowering financing costs and improving profitability. This is the central question addressed by working capital management.

III. Basic Concepts and Objectives of Working Capital

Working capital, or net working capital (NWC), is defined as:

Net Working Capital = Current Assets – Current Liabilities

The primary objectives are: 1. Maintain sufficient liquidity to support day-to-day operations. 2. Minimize the opportunity cost of holding current assets. 3. Balance the cost and risk of short-term financing.

Working capital management therefore encompasses both asset-side decisions (cash, receivables, inventory) and liability-side decisions (payables and short-term debt).

IV. Liquidity and Operating Efficiency Measures

CFA Level I emphasizes the following key ratios:

• Current Ratio = Current Assets / Current Liabilities
• Quick Ratio = (Current Assets – Inventories) / Current Liabilities
• Cash Ratio = (Cash + Cash Equivalents) / Current Liabilities
• Net Working Capital Turnover = Sales / Average Net Working Capital

Receivables Turnover = Sales / Average Receivables
Days Sales Outstanding (DSO) = 365 / Receivables Turnover

Inventory Turnover = Cost of Goods Sold (COGS) / Average Inventory
Days Inventory on Hand (DOH) = 365 / Inventory Turnover

Payables Turnover = Purchases / Average Payables
Days Payables Outstanding (DPO) = 365 / Payables Turnover

Cash Conversion Cycle (CCC) = DSO + DOH – DPO

A shorter CCC indicates that the firm converts cash invested in operations back into cash more quickly, improving working-capital efficiency.

V. Working Capital Investment Policies

Firms may adopt one of three broad policies:

• Relaxed (Conservative) Policy: High levels of cash, inventory, and loose credit terms. High liquidity but high opportunity cost.
• Restricted (Aggressive) Policy: Minimal current-asset balances financed largely by short-term debt. Higher profitability potential but elevated liquidity risk.
• Moderate Policy: Seeks a balance between risk and return.

VI. Short-Term Financing Policies and Sources

The guiding principle is maturity matching: finance short-term assets with short-term funds and long-term assets with long-term funds.

Primary Sources of Short-Term Financing: 1. Bank Loans: Lines of credit, revolving credit facilities, and short-term loans. 2. Commercial Paper: Unsecured short-term promissory notes issued by high-credit-quality firms; usually cheaper than bank loans. 3. Factoring: Selling receivables to a factor for immediate cash (with or without recourse). 4. Inventory Financing: Loans collateralized by inventory. 5. Trade Credit: Spontaneous financing from suppliers; its implicit cost must be calculated when cash discounts are offered.

Cost of Trade Credit Formula (e.g., terms “2/10, net 30”): $$ \text{Annualized Cost} = \left( \frac{\text{Discount \%}}{1 - \text{Discount \%}} \right) \times \left( \frac{365}{\text{Final due day} - \text{Discount day}} \right) $$

Worked Cases

Case 1: Cash Conversion Cycle Calculation

XYZ Corp. reports annual sales of RMB 80 million and COGS of RMB 52 million. Average receivables = RMB 6.5 million, average inventory = RMB 4.8 million, average payables = RMB 3.6 million. Calculate the cash conversion cycle.

Solution: - DSO = 365 × 6.5 / 80 = 29.7 days - DOH = 365 × 4.8 / 52 = 33.7 days - DPO = 365 × 3.6 / (52 × 0.7) ≈ 36.0 days (assuming purchases ≈ 70 % of COGS) - CCC = 29.7 + 33.7 – 36.0 = 27.4 days

The firm requires approximately 27.4 days of working capital to support its sales.

Case 2: Comparing Short-Term Financing Costs

A supplier offers terms “3/15, net 60.” The firm’s annual purchases imply daily purchases of RMB 250,000. Calculate the annualized cost of forgoing the discount and compare it with an 8 % bank line of credit.

Solution: $$ \text{Annualized Cost} = \left( \frac{0.03}{0.97} \right) \times \left( \frac{365}{45} \right) \approx 0.03093 \times 8.111 \approx 25.1\% $$ Because 25.1 % greatly exceeds the 8 % bank rate, the firm should pay within 15 days to capture the discount.

Case 3: Evaluating a Policy Shift

Company A currently has a current ratio of 2.8, quick ratio of 1.1, and CCC of 48 days. Management plans to cut inventory by 20 % and tighten credit policy to reduce DSO from 38 to 28 days. Sales are expected to fall 3 %, but financing costs will decline by RMB 1.8 million. Assess whether the policy is advisable.

Solution: The new CCC ≈ 48 – 10 (inventory reduction) – 10 (DSO reduction) = 28 days. Liquidity risk rises, but financing costs fall sharply. Provided the gross-margin loss from lower sales is less than RMB 1.8 million, the shift from a conservative toward a moderate policy is value-adding.

Traps

Key Formulas

• Net Working Capital = Current Assets – Current Liabilities
• Cash Conversion Cycle (CCC) = DSO + DOH – DPO
• Receivables Turnover = Sales / Avg. Receivables; DSO = 365 / Receivables Turnover
• Inventory Turnover = COGS / Avg. Inventory; DOH = 365 / Inventory Turnover
• Payables Turnover = Purchases / Avg. Payables; DPO = 365 / Payables Turnover
• Cost of Trade Credit = $\left( \frac{\text{Discount \%}}{1-\text{Discount \%}} \right) \times \left( \frac{365}{\text{Days to pay full} - \text{Discount days}} \right)$
• Net Working Capital Turnover = Sales / Average Net Working Capital

Practice Questions

Q1. Which of the following is most likely a characteristic of an aggressive working-capital investment policy?
A. High cash balances
B. Long receivables collection period
C. Low inventory levels
D. High current ratio

Q2. If a company’s cash conversion cycle shortens from 42 days to 28 days, the most likely result is:
A. Increased liquidity risk
B. Reduced need for external financing
C. Substantially higher days inventory on hand
D. Lower days payables outstanding

Q3. A supplier offers terms of “1.5/10, net 40.” The annualized cost of forgoing the discount is closest to:
A. 18.6 %
B. 22.4 %
C. 27.8 %
D. 33.1 %

Q4. Which statement about commercial paper is most accurate?
A. It is usually secured by collateral
B. It can be issued only by firms with high credit ratings
C. Its cost is always higher than bank loans
D. It is a form of long-term financing

Q5. A firm has average net working capital of RMB 12 million and annual sales of RMB 96 million. Its net working capital turnover is:
A. 0.125×
B. 8.0×
C. 12.0×
D. 0.08×

Q6. Which of the following is excluded when calculating the quick ratio?
A. Short-term investments
B. Accounts receivable
C. Inventory
D. Cash

Q7. Assuming the firm has strong creditworthiness, which short-term financing source is typically the cheapest?
A. Receivables factoring
B. Bank line of credit
C. Commercial paper
D. Forgoing cash discounts on trade payables

Q8. If a firm tightens its credit policy from “net 45” to “2/10, net 30,” the most likely effect is:
A. A shorter cash conversion cycle
B. Higher bad-debt losses
C. Significantly higher sales revenue
D. Higher inventory levels

Answers

Takeaways

• The core of working capital management is balancing liquidity and profitability; the key metric is the cash conversion cycle.
• CCC = DSO + DOH – DPO; lower values indicate higher efficiency.
• The annualized cost of trade credit must be calculated with the precise formula; simple multiplication understates the true cost.
• Commercial paper is often the lowest-cost short-term financing source for strong-credit issuers.
• Conservative policies provide high liquidity at high opportunity cost; aggressive policies do the opposite.
• Higher net working capital turnover means each unit of working capital generates more sales.