Discussion: Short-Term Financial Needs and Working Capital

Understanding how much money is needed to sustain daily operations involves forecasting month-to-month cash inflows and outflows. Financial managers who can more accurately project the monthly gap between cash inflows and outflows will be in the best position to determine their financial needs and ensure that the lights remain on. In this Discussion, you will analyze an organization’s short-term financial needs and then propose recommendations for how the organization might best improve its cash position to meet those needs.

To prepare for this Discussion:

• Consider an example of an organization with which you are familiar and about which you have insight regarding its short-term financial needs. (Note: It could be one where you have worked or about which you have sufficient information to bring one or more examples into this Discussion, including the organization you selected for the Weeks 4 and 5 Discussion).
• Reminder: Be sure to be aware of any personal biases you may have about the organization you may discuss this week. Also, be sure to support your assertions using an evidence-based approach.

By Day 3

Post a synthesis of how an organization should approach its short-term financial needs, to include the following:

• Describe at least two examples of short-term financial needs that the organization either has or might have. Be sure to include specific details to support your descriptions.
• Analyze whether the organization should have low, moderate, or high amounts of working capital. Include a rationale for your assertion.
• Propose how the organization could improve its cash position to address its short-term financial needs.

Refer to the Week 6 Discussion Rubric for specific grading elements and criteria. Your Instructor will use this grading rubric to assess your work.

Read some of your colleagues’ postings.

By Day 5

Respond to two or more of your colleagues’ posts in one or more of the following ways:

• Present an additional idea for a short-term financial need your colleague’s organization might have.
• Provide an additional perspective on whether your colleague’s selected organization should have low, moderate, or high amounts of working capital, or an additional perspective on your colleague’s rationale.
• Offer an additional suggestion for how your colleague’s selected organization could improve its cash position to address its short-term financial needs.