Asset-Liability Management for Correcting Mismatch

Samuelson believes that the assets definition should concentrate upon property rights that are concerned with wealth, which provides a true balance sheet orientation, rather than being concerned with revenue generation, Samuelson’s definition may lead to an exit value orientation for assets. One of the key points about the property rights approach lies in exchangeability of the asset. Samuelson’s viewpoint would result in certain deferred charges being expensed immediately even though their incurrence may bring about future economic benefits.

C. Shorter asset lives and accelerated methods encourage additional investment in depreciable property acquired for business use.

| The portion of current assets financed through long-term financing is referred to as the:Answer

As a firm grows, it must invest in new assets to support increased sales volume. The investments in new assets must be financed with some combination of increased liabilities and increasesd equity.

Etowah, Tennessee has implemented an asset-based economic development strategy that has yielded incredible results. Thoroughly researched, the asset-based strategy has produced more positive results and outcomes than negative. From increased job opportunities to the economic growth of the town. However, there are two possible situations, if they occur, that could be detrimental to the town.

The business unit strategies inevitably require investments in accounts receivable, inventories, plant & equipment, and possibly, acquisitions. Step 3 of the process is an attempt to estimate the amount that will be tied up in each of the asset types by virtue of sales growth and the improvement/deterioration in asset management. An analyst can make a rough estimate by studying the past pattern of the collection period, the days of inventory, and plant & equipment as a percent of cost of goods sold; and then applying a “reasonable value” for each to the sales forecast or the forecast of cost of goods sold. Extrapolation of past performance assumes, of course, that the future underlying market, competitive and regulatory “drivers” will be unchanged from the conditions that influenced the historical performance.

Another way the company can impact liquidity and mitigate risk is by paying debts on time and as soon as possible. This lowers interest and saves the company money it can be investing in short-term investments. Collecting outstanding debts is also an important way to mitigate risk. Custom Snowboards can maintain its accounts payables increase without increasing portion of long-term debt. The company can mitigate the risk of accounts receivable not paid on time by ensuring products are delivered on time, properly invoiced, and accurate goods. Accounts receivable should be paid under 30

“Assets are economic resources that have expected future benefits to the business” (Baker, 2014). There are short and long term assets. Short-term assets are assets that will be utilized within a year. Examples of short-term assets are cash, inventory, and accounts receivable. Long-term assets are assets that will continue to beneficial longer than a year. Examples of long-term assets are buildings, land, and equipment.

The four different types of assets are Current Assets, Long-Term Assets, PPE (Property, Plant & Equipment), and Intangible Assets. Team B’s task was to define current assets. A current asset is an asset which can either be converted to cash or used to pay current liabilities within one year. Typical current assets include

 What is the plan to maximize asset and increase asset turnover, which decreased from 2005 to 2008

Capital structure long term is looking at how assets for the business should be paid for. Through the article the common theme is to more efficiently change working capital into cash that can be used to pay for the debt and liabilities for the business. By converting the working capital into cash, the business can make payments without having to take out an extra loan or take on more debt for the business. The working capital management is evaluating the day-to-day finances of the firm and how to make sure it is paid for. Again converting working capital into tangible resources that can be used to pay for the firm is key to covering the businesses operating expenses day to day in this economy. It is more profitable for the company to do this. This will not change the overall total value of assets, but it would shift assets from being fixed into being current. Having more current assets creates a larger net working capital for the business, which is beneficial to them. Determinants of the businesses growth include total asset turnover and the dividend policy. The total asset turnover will be increased if the tips in this article are complied with. This is because having current assets that can and will be used increases this amount. The dividend policy is about choosing how much to pay shareholders versus reinvesting

The current assets are those which are readily convertible into cash and cash equivalents due to their highly liquid nature and also form part of working capital of the company’s operations. However, the long term assets in contrast are not liquid because since they have a useful life of more than a year and hence their full value cannot be easily realized within

Leases - this may be a way to fund particular purchases that allow for expansion. They will normally be leases over assets,

An asset swap is an agreement to swap the form of the stream of future cash flows or benefits generated by an asset, typically from fixed to a market based floating rate such as Libor. The buyer of a bond may prefer floating cashflows as a match for expected future

1.0 INTRODUCTION Asset management is a concept that companies use to ascertain the value of their assets. It provides a quick measure of the worthiness of the organization and so becomes easier for organizations to prepare their final accounts as they are able to quickly estimate the value of their assets. Well managed organizations are required to perform regular fixed asset audits. Tracking and managing corporate assets and equipment is a challenge to most organizations especially when there is a large volume of assets or when those assets move frequently between departments or multiple branches. However in today‟s regulatory environment, it has become more important than ever for companies to