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
Bases of Share Valuation Share valuation can be done on the basis of income and asset values. On the basis of income still a share will be entitled to two forms of income. For

Logistics Management - Supply Chain Management The objectives of logistics management are to: Determine the best routes to market; air, rail or road Determine if w

From the following information related to XYZ Ltd.; you are required to find out (a) contribution (b) Break-even point in units (c) Margin of safety, (d) Profit             Tota

Define two instances of Efficiency Ratio, Liquidity Ratio, Leverage Ratio? 1. Define two instances each of 'Efficiency Ratio', 'Liquidity Ratio', 'Leverage Ratio' and 'Prof

Dividend Basis Valuation Ownership of shares in entities - The owner to obtain a cash flow consisting of future dividends and the value of a share must correspond to the recen

1.) Assume a $1000 face value bond has a coupon rate of 8.5 percent, pays interest semi-annually, and has an eight-year life. If investors are willing to accept a 10.25 percent rat

Marginal cost of finance This is cost of new finances or additional cost a company has to pay to raise and use additional finance is given by: (Total cost of marginal finan

how to make a perdiem claim format to maintain the records of staff

Internal finance can avoid the agency costs of debt and equity finance. In practice it is the most important source of funding. (a) Discuss potential problems of internal financ

For the set of activities shown in the table below, draw the total expenses vs. time curve using the following data: The labor rates are as follows: Labor # 1 (L1) rate = 30