Working Capital and Liquidity

Conquering Working Capital and Liquidity for the CFA Level 1 Exam

Welcome to the thrilling world of Working Capital and Liquidity! Are you ready to dive into the deep end of corporate cash management? Let’s get started!

Sources of Funds

Unwrap the intriguing layers of company financing, exploring internal avenues like accounts receivables and payables, and external sources from revolving lines of credit to issuing common stocks. Uncover the allure of leasing as an alternative to lump-sum purchases and the myriad firm-specific and macroeconomic factors that sway financing decisions.

► Want to test your corporate finance chops? Join our financing decision challenge here.

Managing and Measuring Liquidity

Plunge into the ocean of liquidity management, understanding a firm’s capacity to meet short-term commitments and the primary and secondary sources they tap into for liquidity. Grasp the drags and pulls that can sway a company’s liquidity position and get comfortable with liquidity and turnover ratios. Unravel the mysteries of the operating cycle and the cash conversion cycle, and how they reflect a firm’s liquidity.

► Feel like testing your knowledge? Dive into our interactive liquidity management challenge here.

Evaluating Short-Term Financing Choices

Dive into the nuts and bolts of short-term financing management, learning about the importance of liquidity, handling peak cash needs, and keeping interest costs competitive. Discover the factors that can sway the effectiveness of a short-term financing strategy and the pros and cons of passive versus active borrowing strategies.

► Want to test your strategic planning skills? Jump into our short-term financing interactive game here.