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Level 5 Diploma in Accounting and Business

Managing Working Capital: Receivables, Inventory, and Payables

AB502 · Financial Management — Week 6 of 16

CourseAB502
Week6 of 16
SemesterI
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This week’s topics

Managing Working Capital: Receivables, Inventory, and Payables

  1. Credit assessment and aged debtor analysis
  2. Economic Order Quantity (EOQ) and Just-in-Time (JIT)
  3. Factoring and invoice discounting
  4. Trade credit terms and discount evaluation
  5. Inventory Management – Economic order quantity - ACCA Financial Management (FM)
  6. Management of Accounts Receivables-I
  7. The management of payables - ACCA Financial Management (FM)

What you will be able to do

  • 2.3 Analyse ways in which a business can manage its working capital requirements.

Activity

Start with this week’s 3 videos, then: Seminar, guided reading and a short written task: analyse ways in which a business can manage its working capital requirements.

Study materials

Videos

  • Inventory Management – Economic order quantity - ACCA Financial Management (FM) · YouTube · OpenTuition · 28 min · for registered students
  • The management of payables - ACCA Financial Management (FM) · YouTube · OpenTuition · 13 min · for registered students
  • EOQ with All Unit Discount · YouTube · MIT Center for Transportation & Logistics · 2 min · for registered students
  • EOQ Sensitivity Analysis · YouTube · MIT Center for Transportation & Logistics · 3 min · for registered students

Further resources

  • Principles of Finance 2e, ch. 19: The Importance of Trade Credit and Working Capital in Planning · PDF · OpenStax, textbook chapter; pp. 567–598 · for registered students
  • Operations Management (Fanshawe), ch. 13: Inventory Management · Reading · Other, textbook chapter; PDF pp. 565–600 · for registered students
  • Operations Management (Fanshawe), ch. 16: Just-In-Time and Lean Systems · Reading · Other, textbook chapter; PDF pp. 687–714 · for registered students
Materials marked “for registered students” open in the student portal, which is set up as soon as you receive final acceptance.
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Admitted students ask questions on this week’s page in the student portal: an AI assistant trained on the course answers first, and during the course’s timetabled classes Connect to your tutor brings your tutor into the chat, who may start a call if needed.

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Course plan
  • Week 1: Scope and Objectives of Financial Management
  • Week 2: Operational Functions of Financial Management
  • Week 3: Nature and Elements of Working Capital
  • Week 4: Working Capital Assessment and Funding Strategies
  • Week 5: Managing Working Capital: Cash and Liquidity
  • Week 6: Managing Working Capital: Receivables, Inventory, and Payab…
  • Week 7: Determinants of Capital Structure
  • Midterm: Midterm evaluation
  • Week 9: Capital Structure Theories and External Influences
  • Week 10: Causes of Undercapitalisation and Overcapitalisation
  • Week 11: Strategic Impact of Capital Imbalances
  • Week 12: Applying Financial Management in practice: case studies
  • Week 13: Assignment workshop: research, planning and referencing
  • Week 14: Assignment workshop: drafting, feedback and improvement
  • Week 15: Review and coursework completion
  • Final: Final assessment and submission
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