Matching approach - financing current assets, Finance Basics

Matching Approach - Financing Current Assets

This approach is further referred to as the hedging approach. Beneath this approach, the firm adopts a financial plan that involves the matching of the expected life of assets along with the expected life of the origin of funds raised to finance assets. Hence the firm uses short-term funds to finance temporary assets and long term funds to finance permanent assets. Permanent assets refer permanent current assets and to fixed assets. This approach can be signifying by the following figure:

408_Matching Approach - Financing Current Assets.png

Posted Date: 1/31/2013 7:53:50 AM | Location : United States







Related Discussions:- Matching approach - financing current assets, Assignment Help, Ask Question on Matching approach - financing current assets, Get Answer, Expert's Help, Matching approach - financing current assets Discussions

Write discussion on Matching approach - financing current assets
Your posts are moderated
Related Questions
ROS - Return on Sales (Profit Margin) The Average of the industry ROS was 5.18% for 2004, 4.41% for 2005, and 7.20% for 2006. The chart showed that ROS has been declined f

Question 1: a) Explain the framework put forward by the Basel Committee to ensure that banks and supervisors give appropriate attention to the second (supervisory review) and

Suppose an entrepreneur owns a firm which has two production opportunities. Technology A generates an output (net profit) of 10 in state 1, an output of 20 in state 2, and an outpu

Constraints of Venture Capital in US 1. Require of rich investors in US, thus inadequate equity capital. 2. Inefficiencies of stock market - NSE is investors and inefficien

Basic EOQ Model The basic inventory decision model is Economic Order Quantity or called EOQ model. This model is specified via the following equation as: Whereas:Q is

Question 1: a) What is dependency ratio and why is it important for pensions? b) For which types of schemes is dependency ratio mostly relevant? Explain c) What is the

Central Depository System or C.D.S Its computerized ledger systems which enable the transfer or holding of securities with no necessitate for physical movement.  The shares or

Supersoftware, Inc. earns a total of $200 million each year to pay out to their 20 million shareholders. They are in a very competitive business and have found it a struggle to com

Proforma Balance Sheet This refers to the projected balance sheet at the finish of forecasting period.  The items in the proforma balance that vary with sales would be determi

Growth and Valuation Ratio This ratio indicates the growth potential of the firm in addition to determining the value of the firm and investment made via various investors.  T