After studying Chapter 8, you should be able to:

Explain how the definition of "working capital" – obrtni kapital – obrtni kapital - - differs between financial analysts and accountants

Understand the two fundamental decision issues in working capital management – dve osnovne odluke dve osnovne odluke - and the trade-offs involved in making these decisions

Discuss how to determine the optimal leveloptimal level of current assets Describe the relationship between profitabilityprofitability, liquidityliquidity, and

riskrisk in the management of working capital Explain how to classify working capital according to its

“components” and according to “time” (i.e., either permanent or temporary) - klasifikacijaklasifikacija

Describe the hedging (maturity matching) approach to financing and the advantages/disadvantages of short- versus long-term financing

Explain how the financial manager combines the current asset decision with the liability structure decision

Overview of Working Capital Management

Working Capital Concepts Working Capital Issues Financing Current Assets: Short-

Term and Long-Term Mix Combining Liability Structure and

Current Asset Decisions

Working Capital Concepts

Net Working CapitalNet Working Capital

NETO OBRTNI KAPITALNETO OBRTNI KAPITALCurrent Assets - Current LiabilitiesCurrent Assets - Current Liabilities

Tekuća aktiva – Tekuća pasivaTekuća aktiva – Tekuća pasiva

Gross Working CapitalGross Working Capital

BRUTO OBRTNI KAPITALBRUTO OBRTNI KAPITALThe firm’s investment in current assetsThe firm’s investment in current assets

Working Capital ManagementWorking Capital ManagementThe administration of the firm’s current assets and the financing needed to The administration of the firm’s current assets and the financing needed to

support current assetssupport current assets

Significance of Working Capital Management

U tipičnoj proizvodnoj kompaniji, tekuća aktiva često čini više od polovine ukupne aktive (imovine)

Kod malih preduzeća tekuće obaveze čine jedan od najdominantnijih izvora eksternog finansiranja

Suviše visok nivo tekuće aktive može imati za rezultat nizak nivo profitabilnosti meren kroz prinos na investicije - Return on Investment (ROI)

Zahtevaju kontinuelno, svakodnevno upravljanje i nadzor (Requires continuous, day-to-day managerial supervision)

Upravljanje obrtnim kapitalom utiče na rizik, prinos i cene akcija kompanije (Working capital management affects the company’s risk, return, and share price)

KONCEPT OBRTNOG KAPITALA2 OSNOVNA PITANJA U UPRAVLJANJU 2 OSNOVNA PITANJA U UPRAVLJANJU

OBRTNIM KAPITALOMOBRTNIM KAPITALOM

1) Optimalan nivo investicija u tekuću aktivu

2) Odgovarajuća kombinacija kratkoročnog i dugoročnog finansiranja

Trade-off (kompromis) izmedju profitabilnosti i rizika – Manje investiranje u tekuću aktivu vodi ka

većoj profitabilnosti ali i većem riziku

Working Capital Issues

AssumptionsAssumptions 50,000 maximum

units of production Continuous

production Three different

policies for current asset levels are possible

Optimal Amount (Level) of Current AssetsOptimal Amount (Level) of Current Assets

0 25,000 50,000OUTPUT (units)

AS

SE

T L

EV

EL

($)

Current Assets

Policy CPolicy C

Policy APolicy A

Policy BPolicy B

Impact on Liquidity

Liquidity AnalysisLiquidity AnalysisPolicy Liquidity AA HighHigh BB AverageAverage CC LowLow

Greater current asset levels generate more liquidity; all other factors held constant

Veći nivo tekuće aktive Veći nivo tekuće aktive generiše veću likvidnost generiše veću likvidnost (ostali faktori konstantni)(ostali faktori konstantni)

Optimal Amount (Level) of Current AssetsOptimal Amount (Level) of Current Assets

0 25,000 50,000OUTPUT (units)

AS

SE

T L

EV

EL

($)

Current Assets

Policy CPolicy C

Policy APolicy A

Policy BPolicy B

Impact on Expected Profitability

Return on Investment =Return on Investment =

Net ProfitTotal AssetsTotal Assets

Let Current AssetsCurrent Assets = (Cash + Rec. + Inv.)

Return on Investment =Return on Investment =

Net ProfitCurrent Current + Fixed AssetsFixed Assets

Optimal Amount (Level) of Current AssetsOptimal Amount (Level) of Current Assets

0 25,000 50,000OUTPUT (units)

AS

SE

T L

EV

EL

($)

Current Assets

Policy CPolicy C

Policy APolicy A

Policy BPolicy B

Impact on Expected Profitability

Profitability AnalysisProfitability AnalysisPolicy Profitability AA LowLow BB AverageAverage CC HighHigh

As current asset levels decline, total assets will

decline and the ROI will rise – Niži nivo tekuće aktive, Niži nivo tekuće aktive, viši nivo profitabilnostiviši nivo profitabilnosti

Optimal Amount (Level) of Current AssetsOptimal Amount (Level) of Current Assets

0 25,000 50,000OUTPUT (units)

AS

SE

T L

EV

EL

($)

Current Assets

Policy CPolicy C

Policy APolicy A

Policy BPolicy B

Impact on Risk

Decreasing cash reduces the firm’s ability to meet its financial obligations - More More risk!risk!

Stricter credit policies reduce receivables and possibly lose sales and customers - More risk!More risk!

Lower inventory levels increase stockouts and lost sales - More risk!More risk!

Optimal Amount (Level) of Current AssetsOptimal Amount (Level) of Current Assets

0 25,000 50,000OUTPUT (units)

AS

SE

T L

EV

EL

($)

Current Assets

Policy CPolicy C

Policy APolicy A

Policy BPolicy B

Impact on Risk

Risk AnalysisRisk AnalysisPolicy Risk AA LowLow BB AverageAverage CC HighHigh

Risk increases as the level of current assets are

reduced – Rizik raste Rizik raste paralelno sa smanjenjem paralelno sa smanjenjem

nivoa tekuće aktivenivoa tekuće aktive

Optimal Amount (Level) of Current AssetsOptimal Amount (Level) of Current Assets

0 25,000 50,000OUTPUT (units)

AS

SE

T L

EV

EL

($)

Current Assets

Policy CPolicy C

Policy APolicy A

Policy BPolicy B

Summary of the Optimal Amount of Current AssetsSUMMARY OF OPTIMAL CURRENT ASSET ANALYSISSUMMARY OF OPTIMAL CURRENT ASSET ANALYSIS

Policy LiquidityLiquidity ProfitabilityProfitability RiskRisk

AA High High LowLow Low Low

BB AverageAverage Average Average Average Average

CC Low Low High High High High

1. Profitability varies inversely with liquidity1. Profitability varies inversely with liquidity – – Kretanje Kretanje profitabilnosti i likvidnosti je inverzno – Rast nivoa profitabilnosti i likvidnosti je inverzno – Rast nivoa likvidnosti umanjuje profitabilnost i obrnutnolikvidnosti umanjuje profitabilnost i obrnutno

2. Profitability moves together with risk2. Profitability moves together with risk (risk and return go hand (risk and return go hand in hand!)in hand!) – – Profitabilnost je u direktnoj srazmeri sa Profitabilnost je u direktnoj srazmeri sa nivoom rizika – Veća profitabilnost – veći rizik i obrnutonivoom rizika – Veća profitabilnost – veći rizik i obrnuto

Classifications of Working Capital

TimeTime – Prema vremenu – Prema vremenu Permanent – Trajni Trajni – nivo tekuće aktive kojim preduzeće

treba da ispuni svoje minimalne dugoročne obaveze Temporary – Povremeni Povremeni – zavisi od sezonskih potreba

ComponentsComponents – Komponente – Šta čini – Komponente – Šta čini obrtni kapital?obrtni kapital? Cash, marketable securities, receivables, and

inventory – Novac, utržive hartije od vrednosti, potraživanja i zalihe

Permanent – Trajni Working Capital

The amount of current assets required to The amount of current assets required to meet a firm’s long-term minimum needsmeet a firm’s long-term minimum needs – –

Nivo tekuće aktive kojim se zadovoljavaju Nivo tekuće aktive kojim se zadovoljavaju minimalne duguročne potrebeminimalne duguročne potrebe

Permanent current assetsPermanent current assets

TIME

DO

LL

AR

AM

OU

NT

Temporary – Povremeni Working Capital

The amount of current assets that varies with The amount of current assets that varies with seasonal requirementsseasonal requirements – Nivo tekuće aktive – Nivo tekuće aktive koji varira u zavisnosti od sezonskih uticajakoji varira u zavisnosti od sezonskih uticaja

Permanent current assetsPermanent current assets

TIME

DO

LL

AR

AM

OU

NT Temporary current assetsTemporary current assets

Financing Current Assets: Short-Term and Long-Term Mix

Spontaneous Financing – Spontaneous Financing – Spontano finansiranjeSpontano finansiranje: : Trade credit, and other payables and accruals, that Trade credit, and other payables and accruals, that arise spontaneously in the firm’s day-to-day arise spontaneously in the firm’s day-to-day operationsoperations – Trgovački krediti, ostala dugovanja i – Trgovački krediti, ostala dugovanja i obračunati rashodi koji se spontano javljaju tokom obračunati rashodi koji se spontano javljaju tokom svakodnevnih aktivnostisvakodnevnih aktivnostiFinansiranje tekuće aktive zahteva kombinaciju kraktoročnih i dugoročnih izvora

Spontano finansiranje – glava XI – kratkoročno finansiranje

Kako finansirati tekuću aktivu nakon oduzimanja spontanog finansiranja?

Hedging (or Maturity Matching) Approach

1 od načina – hedžing – uklapanje dospećahedžing – uklapanje dospeća – metod finansiranja kod koga za svaku pojedinačnu aktivu postoji odgovarajuća suprotna pozicija u finansijskom

instrumentu približno istog roka dospeća – Kratkoročne obaveze finansirane kratkoročnim dugom, fiksna aktiva – dugoročnim izvorima

TIME

DO

LL

AR

AM

OU

NT

Long-term financingFixed assetsFixed assets

Current assetsCurrent assets

Short-term financing

Hedging (or Maturity Matching) Approach

Dugoročni izvoriDugoročni izvori – za finansiranje fiksne aktive i nesezonskog dela tekuće aktive - Fixed assets and the non-seasonal portion of current assets are financed with long-term debt and equity (long-term profitability of assets to cover the long-term financing costs of the firm)

Kratkoročni izvoriKratkoročni izvori – sezonske potrebe - Seasonal needs are financed with short-term loans (under normal operations sufficient cash flow is expected to cover the short-term financing cost)

Self-Liquidating Nature of Short-Term Loans

ANATOMIJA LIKVIDIRANJA KRATKOROČNOG DUGAANATOMIJA LIKVIDIRANJA KRATKOROČNOG DUGA Ukoliko se koriste kratkoročni izvori finansiranja važno

pitanje iz kojih izvora mogu da se vrate Sezonske potrebe uslovljene povećanjem kupovina zaliha

iznad nekog prosečnog nivoa Povećanje zaliha se koristi za zadovoljavanje rastuće tražnje

za gotovim proizvodima Dolazi do rasta prodaje Izdate fakture počinju da se naplaćuju i prikuplja se gotovina Tako sakupljena gotovina se koristi za otplatu sezonskog

kratkoročnog duga i pokriće troškova dugoročnog finansiranja

Risks vs. Costs Trade-Off (Conservative Approach) Postoje 2 pristupa finansiranju tekućih obaveza – zavise od pristupa i odnosa prema riziku i troškovima (profitabilnosti)

1) KONZERVATIVNI PRISTUP1) KONZERVATIVNI PRISTUP – bazira na tome da se manji iznos finansira spontano iz kratkoročnih izvora

Prednosti dugoročnog finansiranjaPrednosti dugoročnog finansiranja Manja briga o refinansiranju kraktoročnih obaveza Manja neizvesnost u pogledu budućih troškova kamata

Rizici dugoročnog finansiranjaRizici dugoročnog finansiranja Pozajmljivanje više sredstava nego što je neophodno Pozajmljivanje po viših ukupnim troškovima kapitala (najčešće)

ReRezultatzultat CFO prihvata manji očekviani profitmanji očekviani profit u razmenu za preduzimanje manjeg manjeg

ukupnog rizikaukupnog rizika

Risks vs. Costs Trade-Off (Conservative Approach)Firm can reduce risks associated with short-term borrowing by using a

larger proportion of long-term financing

TIME

DO

LL

AR

AM

OU

NT

Long-term financingFixed assetsFixed assets

Current assetsCurrent assets

Short-term financingShort-term financing

Comparison with an Aggressive Approach

2) AGRESIVNI PRISTUP2) AGRESIVNI PRISTUP – bazira na tome da se veći iznos finansira spontano iz kratkoročnih izvora

Prednosti kratkoročnog finansiranjaPrednosti kratkoročnog finansiranja Finansiranje dugoročnih potreba nižim troškovima Pozajmljivanje samo onoliko sredstava koliko je

potrebno Rizici kratkoročnog finansiranjaRizici kratkoročnog finansiranja

Refinansiranje kratkoročnih obaveza u budućnosti Neizvesnost u pogledu kamatnih troškova – koliko će

iznositi troškovi refinansiranja ReRezultatzultat

CFO prihvata veći očekivani profitveći očekivani profit u razmenu za veći preduzeti rizikveći preduzeti rizik

Firm increases risks associated with short-term borrowing by using a larger proportion of short-term financing

TIME

DO

LL

AR

AM

OU

NT

Long-term financingFixed assetsFixed assets

Current assetsCurrent assets

Short-term financing

Risks vs. Costs Trade-Off Risks vs. Costs Trade-Off (Aggressive Approach)(Aggressive Approach)

ODNOS KRATKOROČNOG PREMA DUGUROČNOM FINANSIRANJU

DOSPEĆE IZVORAFINANSIRANJA

DOSPEĆEAKTIVE

KRATKOROČNI DUGOROČNI

NizakRizik-profitabilnost

UmerenRizik-Profitibilnost

UmerenRizik-Profitibilnost

VisokRizik-profitabilnost

KRATKOROČNA(PovremenaPovremena)

DUGOROČNA(TrajnaTrajna)

KOMBINOVANJE ODLUKA O TEKUĆOJ AKTIVI I STRUKTURI PASIVE

Pitanje održavanja nivoa tekuće aktive nivoa tekuće aktive i izbora izbora mmetodetodaa finan finansiranja te aktivesiranja te aktive mogu biti nezavisninezavisni

PolitikaPolitika održavanja visokog nivoa tekuće aktive trebalo bi da podrazumeva više korišćenje agresivagresivnognog metod finansiranja tekuće aktive

Konzervativni Konzervativni metod finansiranja (all-equity) dozvoljava agresivagresivnunu poli politikutiku “niskog” nivoa tekuće aktive

Odluke zavise od sklonosti riziku i profitabilnosti!!!