Chapter

Working Capital, Seasonality, and Growth

Lorenzo A. Preve and Virginia Sarria-Allende

in Working Capital Management

Published in print March 2010 | ISBN: 9780199737413
Published online May 2010 | e-ISBN: 9780199775637 | DOI: http://dx.doi.org/10.1093/acprof:oso/9780199737413.003.0003

Series: FMA SURVEY

Working Capital, Seasonality, and Growth

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In this chapter, we address the question of how a firm should finance its operation. More specifically, the chapter aims to help managers gain a better understanding of the relation between a firm's level of operating activity and working capital. Given that, from a managerial perspective, a certain portion of short‐term operating assets is to be considered long term, firms should select an accurate share of long‐term financing to ensure matching financing maturity to assets' average life. The chapter presents how the optimal financing choice is influenced by seasonality and growth.

Keywords: corporate finance; working capital management; financial needs for operation; financial analysis; seasonality and growth

Chapter.  4297 words.  Illustrated.

Subjects: Financial Markets

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