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Effective Working Capital Management and Optimal Synchronization of Cash Flows

How do firms choose their operating cycle? How do firms choose their cash conversion cycle? What is the impact of firm’s operating cycle on the size and periodicity of investments in receivables and inventories? How do seasonal and cyclical trends affect firm’s operating cycle, cash conversion cycle and investments in current assets? These strategic policy questions relate to optimal cash flows synchronization and effective working capital management designed to maximize the wealth producing capacity of the enterprise.

In this review, we will examine some pertinent and extant academic literature on effective working capital management and provide some operational guidance to small business enterprises. The shorter the cash conversion cycle, the smaller the size of the firm’s investment in inventories and receivables and consequently the less the firm’s financing needs. Although setting ending cash balances is, to a large extent, judgmental, some analytical rules can be applied to assist effective formulation of better judgments and optimize cash flow management.

As you know, a correlate to cash is net working capital. Net working capital is not cash but the difference between current assets (what a firm currently owns) and current liabilities (what a firm currently owes). Current assets and current liabilities are firm’s immediate sources and uses of cash, respectively. Clearly, a firm’s ability to meet its current financial obligations (bills due within a year) depends on its ability to manage its current assets and liabilities, efficiently and effectively.

Effective working capital management requires the formulation of optimal working capital policy and the periodic management of cash flows, inventories, account receivables, accruals and account payables. And because poor working capital management can severely damage a firm’s credit worthiness and limit its access to money and capital markets, every effort must be made to minimize business default risk.

The significance of liquidity cannot be overemphasized. In addition, anything that adversely impacts a firm’s financial flexibility degrades its ability to borrow and cope with unexpected financial hardship. A firm must preserve its ability to react to unexpected expenses and investment opportunities. Financial flexibility derives from a firm’s use of leverage as well as cash holdings.

In practice, optimal working capital management includes effective cash conversion cycle, effective operating cycle, the determination of appropriate level of accruals, inventories, and account payables and the attendant funding options. Working capital policy impacts a firm’s balance sheet, financial ratios (current and quick assets) and possibly credit rating. Critical to efficient firm’s working capital management is a good understanding of its cash conversion cycle, or how long it takes for a firm to convert cash invested in operations into cash received.

The cash conversion cycle captures the time passed from the beginning of the production process to collection of cash from the sale of the finished products. Typically, a firm purchases raw materials and creates products. These products go into inventory and then are sold on account. Once the products are sold often on credit then the firm waits to receive payment, at which point the process begins again. …

Take Responsibility For Your Financial Health

Take responsibility for YOUR financial health.  All aspects of it: expenses, income, savings, retirement, investing, pocket change, the works.

This is a simple idea with potentially profound implications. Yes, it may be a bit cliché, but that doesn’t mean that it isn’t true. Everyone would like to improve their life in some way – financially, mentally, physically, emotionally, or a huge variety of others – but nobody can until they accept that, fundamentally, they are responsible for what will happen.

The first step to take is to do just that: assume full responsibility for your financial health. Regardless of your situation, you can’t dwell on the past. It doesn’t matter if you got hit by a disaster, laid off, if a business deal went south, or if you think weren’t positioned right from the start. As long as you focus on the problems you perceive, you will be unable to move forward in your financial life.

Forgive everyone for all the bad things they have done to you. Let go of what has happened to you before. Stop thinking about the negatives and the past events that have placed you into whatever your current situation is.. Right now – don’t put this off, saying “Oh, that’s a good thought, I’ll consider it.” And there should be no half measures, even if you share finances. Assume 100{4917788a0bd7aa7369c2a945027b4fe6c9853cda4150a24fe1255b18ce3083dc} of the responsibility for your physical and financial health or you won’t be able to improve your situation. Above all else you must hold yourself personally responsible.

This is now going to let you take power over your financial health. If you want to change your situation for the better, you must have that power, plain and simple. Assuming full responsibility means you have no excuses when you fall off the wagon, no exemptions for slips, moments of weakness, and no one to pass the blame to when you aren’t as responsible as you want to be.

Without 100{4917788a0bd7aa7369c2a945027b4fe6c9853cda4150a24fe1255b18ce3083dc} responsibility you are utterly powerless. You’ll find ways to blame the world, your significant other, the economy, or something else. If you want things to change, you have to step into your power fully and completely. And you can’t do that if you remain in denial of even a smidgen of your responsibility. Now, I don’t mean that you need to blame yourself every time you slip even the slightest bit or something goes wrong. Not all circumstances are within your control. But you do always have the ability to respond to changes in your situation, so remember that!

Accepting responsibility for your own finances gives you the power to change your financial health for the better. It must be your own force of will that does so, but knowing that it’s on you makes all the difference in the world. Use your creativity and abilities to make the best of it!…

How to Pray and Receive a New Car – Within 4 Weeks!

Last month, one of my readers needed a new

car. He asked the LORD for it. And the Lord

answered and showed him this beautiful,

new SUV.

Only problem was: he had no money to

buy it.

He asked me if I had prayer points to

release the car.

I gave him my closely guarded recipe

(one that I used personally to attract

my new car and my new house).

Here it is:

1. Pray the prayer of a DOER according

to Phil.4:13 (A friend just christened it,

“The 6 little prayers that move mountains”)

2. Say to the Holy Spirit

– I really desire this car

– but the money is not yet in my

bank account

– how can I create value for OTHERS so

that I’ll be compensated and I can

buy this car?

3. Then the Holy Spirit will

– lead you to go out

– create value

– trade that value for money

– trade that money for the car

Rapid Result

– he was able to create a useful product

– sell it and get the money to buy the

car

– ALL WITHIN 4 WEEKS!

Everyone has benefited – he’s got his dream

car; others are enjoying the product he

created; and the amount of value in the

world has grown for everyone – all within

4 weeks!

In A Nutshell

I have just uncovered to you the

“Secrets” of what is called the

“Prayer of the Doer.”

This is a prayer so powerful, it has

been kept under lock and key by veteran

prayer warriors through the ages.

Among the insiders, it is discussed only

in “hushed” tones.

* It is a mysterious prayer that’s been

known to turn paupers into millionaires

almost overnight.

* Those who’ve been tutored on how to apply

it well have been reported to have started

businesses almost out of nothing and grown

them beyond their wildest dreams… in very

short order.

Please go through this little piece again carefully

and let the Holy Spirit speak to your

heart.

This is how God wants his children

to create value in our world.

Apply these simple steps diligently and you’ll

soon find yourself swimming in the ocean

of abundance.

You can find more information on this

and more in the latest version of

my popular ebook, “Prayer Cookbook for

Busy People.” Plus, the prayer points

and WHEN to pray them.

Get it here: http://www.firesprings.com/freereport4.htm

Be blessed!…

Russian Superstitions

Russians are very superstitious people. They will deny this, but it is true. These superstitions affect my life on a daily basis. Most of the time they are harmless and I go along with them to humor my wife. Sometimes I tease her about them.

New superstitions pop up all the time, as new situations arise in our life. I keep telling her that I need a rulebook for them. Perhaps someday I will codify them in a book.

Russians are raised with these superstitions so they have no need to consult a manual.

Here are some of them. It is by no means an exhaustive list:

1) You can’t whistle in the house or car, as they believe that you are whistling away your money.

At a dinner party at our house, a friend of mine started whistling. My wife silenced him immediately. She explained to him, “You can whistle in your own house, but you can’t whistle in mine. In my house, it’s my money you are whistling away.”

When she first came to America, she would see people standing at intersections holding signs. She asked me what they were doing. I told her they were asking for money. She asked me why. I told her that they had done entirely too much whistling in their house for their own good.

2) If you step on your spouse’s shoe by accident, you have to let the other person step on your shoe, or you will have an argument.

I never tested this superstition. It seemed easier to go along with the remedy than pay the price for violating it.

3) If you leave your house, you cannot go back inside for something you have forgotten, or your trip will result in ‘nothing good,’ as my wife says.

4) If you must go back in to get the forgotten item, you can try to mitigate the bad effects of returning by looking into the mirror at your own reflection for a moment before you leave again.

5) Never demonstrate another’s surgery or wound on your own body with your hand or other means as you are likely to visit that upon yourself.

In the few times I have done this, my wife has tried to remedy this by wiping away the spot where I made the imaginary incision with her hand, blowing on her hand to blow it away to the wind, and covering it with the sign of the cross.

6) Never give a Russian woman an even number of flowers. Even numbers are for the dead. Always give odd numbers. When you order a dozen, or two dozen roses, for her, ask them to throw in an extra one for good luck.

7) Never give yellow flowers to a Russian woman. It signifies infidelity and may mean that your relationship will not last.

8) Never give a watch as a gift to a Russian woman. Time is running out on your relationship.

9) Never give knives or …

Engineering Business – Marketing Your Unique Selling Proposition

You know that you work that your engineering company is the best out there, but does the public know that? What makes your firm better than the competition? Do your prospective clients know that? What advantages and benefits do your clients have by using your firm? This is marketing; Getting the word out about you and your company.

A major part of marketing is describing how your company is different from the competition, and how that benefits your clients. Most engineering firms do very little marketing outside of word of mouth and maintaining client relationships. Most of the time this may be all you need to do to stay busy, but if you want to grow your company you will need more clients and contracts. What happens when your clients start to fade away or decide to use someone else? To stay busy you will need to employ several well planned marketing tactics.

One of the best ways to market is to inform the public of your difference from the competition by creating a Unique Selling Proposition or USP. A USP is what makes your firm different from your competition. If you want to immediately stand out in the engineering community, have a clearly defined USP. Ask the question "Why your potential clients would have chosen to do business with your firm versus the competition?" What separates your engineering firm from the competition? The answer is your USP. Your engineering company has better services, a guarantee, better selection of services, longer business hours, more flexible payment options, or a combination of all of these and more. You should be able to summarize your USP in one sentence. A great USP will have your potential clients thinking or saying, "I have to do business with these guys." Most companies inadvertently talk about creating a USP, but do not actually implement it.

Unfortunately, most USP's are not unique; Because many firms will review other USP's and copy the best words. They will search the internet, review several business books, and may even ask other individuals and then combine the results into their own USP. If most USP the client reads are similar, then they have no meaning.

Again most of the marketing books available in the bookstore are not for professional service business like engineering. A personal service client is looking benefits more so than any other type of client. A customer of large chain store is probably looking for low price product. A client of designer is looking for quality name brand and not necessarily lowest price. But a client of professional service company is looking for something quite different. What do you want from a lawyer, a doctor, an accountant, or a designer? Are you looking for bonuses, sales, and discounts? Of course not!

A true USP answers the client needs. What is it that clients are looking for? Based on our experience most buyers want their professional service provider to have one or more of following characteristics:

1 –

Realizing Personal Economic Independence

An individual is initially dependent on others during the early phase of life; first 20 years. Throughout this phase, the person obtains knowledge on multiple subjects, attains wisdom through manifold observations, and builds up moral strength by means of spiritual/humane practices. Nevertheless, the person is barely in touch with the business world during this phase. Later on, along with multi-dimensional independent life experiences, the individual, in the second phase of life, is consequentially apprised about economic fields and economic works.

Human life embraces multiple needs and countless facilities for normal living. Basic human needs include healthy food, fresh water, proper clothes, right sanitation, complete shelter, necessary medical aids, easy transportation and appropriate education. The innate human nature extends the individual’s contentment boundary towards countless paraphernalia of life, such as, aesthetic dressing, delicious foods, magnificent residence, superior education, unlimited medical assurances, and so on and so forth. In order to fulfil both, needs and facilities, money is the fundamental prerequisite. Proactive efforts are indispensable to earn money units. Namely, a work for the sake of monetary reward is called an economic work.

Technically, personal economic independence is defined in the dictionary as “the income threshold at which a person can live without relying on the support of others.” At this stage, the economic agent can purchase required, and even desired, goods for personal advantage. Realistically, stream of successful execution of economic works by the individual is the only way to reach personal economic independence. The main ambition of this article is to portray the roadmap towards the actualization of a stable income stream, and hence, economic independence. I will try to reach the focal point of the paper by providing a simple technique to realize the perfect profession, a proper method for execution of economic work, and effective tips to overcome hurdles during economic struggle.

Opting the Right Profession

There are boundless economic works available in the modern world. Needless to say, the invention of internet and technology has further introduced oodles of online works as well. Selection of the right profession is duty of the economic agent. How may he/she opt for the right profession? Jeff Goins, author of the bestseller, The Art of Work, gives answer to the question. He offers a stunning approach to discover the purpose of life. Once the purpose is realized, one can consequently comprehend the right profession. Jeff writes: “when you pay attention to your life and the lessons it can teach you, you won’t feel so lost. Your story will seem less like a series of disjoined events and more like a beautifully complex narrative unfolding before you. You will understand each setback, inconvenience and frustration as something more than what it appears to be. And perhaps, as you listen to it, your life will speak.”

Jeff, in his case, listed out a few memories from his life and during the exercise, he was able to grasp his purpose; to become a writer. An economic agent, at the outset, can also implement the …

SBLC Funding and Monetizing Bank Instruments For Project Funding

Standby letter of credit (SBLC) funding or the monetizing of bank instruments including Bonds, SBLC’s, BG’s, LC’s or SKR’s to fund projects are on the rise. While lending from traditional institutions has virtually come to a production stand still, the monetizing of instruments is on the rise; and for good reason.

SBLC funding or the monetizing of bank instruments is very popular because there are no traditional credit requirements, asset requirements or down payments associated with conventional funding or lending. However, there are very strict requirements in the approval process which includes a favorable compliance report associated with Homeland Security and International Money Laundering Laws.

The process of monetizing bank instruments involves converting a secured instrument, usually backed by a cash, secured account or secured asset, into something legal tender. Many times, the secured or cash backed account or asset is held in a trust or another account in which the holder is unable to retrieve additional funds per the agreement of the account.

Why monetize? As an example, in the economic security of the market 5 years ago, hospitality financing was a very tedious and difficult industry to finance, but still attainable. Today, hospitality financing is almost impossible for those who are seeking new purchases, refinancing, remodeling or construction. If you currently own a hospitality property, the chances of getting funding are greater but depend on performance spanning over a 3 to 5 year period. SBLC funding for hospitality projects or monetizing an instrument can be the solution as there are no performance requirements; the performance is based on the guarantee of the instrument and not the property.

This also stands true for residential developments that are in the mid-stages of construction and halted by the inability to continue to draw on previously arranged credit lines. Commercial developments will also benefit by this method of funding as there are no “anchor” requirements or tenant rolls to supply. Alternative energy project financing are particularly viable for sblc funding or via monetizing a bank instrument. These overcome traditional funding sources tangible asset requirements.

The list is endless as to the uses of the funds for projects and developments. For example, monetizing can also be a viable solution to community economic development, housing and employment creation as well as debt consolidation for corporations and companies.

A few words of warning to those seeking bank instrument providers and monetizing companies. Fraud in this industry is on the rise. The instruments should be issued by Top 25 World Banks. Leased instruments can be monetized but it takes the expressed written permission of the holder of the instrument and of the issuing bank, stating the agreement between all parties and the expressed knowledge of the intention of using the instrument. There should also be a contract issued to the customer after approval, outlining the terms and conditions of instruments and monetizing.

Finally, fees should be deducted from the proceeds when monetizing so there are no upfront costs to you. Arranging instruments usually results in escrowed …

Insurance Marketing: Take Your Bio From Stale To Stellar

How well does your professional bio showcase your abilities? Does it tell your personal brand story? Is it current and compelling?

Unfortunately, most insurance professional bios are stale and boring. They lack heart, depth and inspiration. Company profiles are often riddled with tired clichés and insurance industry jargon. And the typical executive bio is no better than a resume – a bulleted list of jobs and skills that can easily be forgotten.

A descriptive and well-written business bio puts a personal face on your offering and makes insurance prospects feel more comfortable and at ease. It clearly conveys your credibility and demonstrates your success, giving your prospects faith that you can really deliver on your promises.

Professional bios are multi-talented insurance marketing pieces. They can be incorporated into insurance websites, brochures and sales sheets. They can also be used for:

  • Insurance article bylines
  • Speaking engagements
  • Professional introductions
  • Networking
  • LinkedIn and other social networking profiles

Professional bios are highly recommended for insurance executives, insurance agents and anyone else who strives to develop and market a personal brand. In fact, some innovative, service-driven insurance companies display bios for all customer-facing employees on their websites.

BIO Dos

  • Use vivid examples of your capabilities.
  • Include objective measures of your successes.
  • Incorporate a few interesting quotes.
  • Keep the writing formal and in third person.
  • Customize your bio for each potential audience.

BIO Don’ts

  • Avoid long resume-style lists of job titles.
  • Don’t write in the first person.
  • Resist the urge to be verbose. Most bios can be completed in one to two pages.

Isn’t it time to tell your professional story in a way that’s relevant and interesting to your target market?

Fundamentals Of Sheet Metal Fabrication Business Requirements

The sheet metal fabrication industry is growing leaps and bounds these days. Wherever there is a construction happening, there would be a need for metal fabricators. Metal fabricators shops are generally small businesses that operate locally. Depending on the projects, the fabricators need to equip themselves with the latest tools and technologies. Experienced ones are not only experts in the fabrication, but they are experts in all kinds of metal fabrication works.

Prerequisites For Starting A Sheet Metal Fabrication Business

If you are planning to start up a small shop, you will need to familiarize yourself with these working tools,working machinery, shop safety, materials used in the trade, sheet metal types, and fasteners for them. In addition, you will need to have in-depth knowledge about processes such as punching, drilling, riveting, folding edges, making seams, turning, burring, raising, forming, crimping, beading, grooving, and soldering. When you are starting up a shop, you will need to purchase or rent a shop. The location of the shop needs to be strategic.

These business can be very lucrative if you have the right costing and you know how to maximize profits. There is tough competition in the fabrication business, so you will have to ensure that you prices are competitive. The industry is highly diversified industry and produces more products than most people realize. Right from air-conditioning ductwork to railroad box cars are all made of sheet metals. Due to this diversity, the sheet metal fabricating industry can withstand the ups and downs of the global economy. When you are about to start the sheet metal or metal fabricating business, you must know where to begin from.

There are several entrepreneurs who have the money to start the business, but they don’t know where to put the money and how to start the business. As an entrepreneur, you have two choices in the business. First, you can either start the business for a specific product such as ductwork. Second, you can start off as a generic service provider.

As a metal fabricator, you need to be very flexible and proactive to customer demands or requirements. Customers can either provide the designs or they may expect you to come up with the designs. In both situations, you will have to ensure that you give perfect service to the customer. Even though the business is a small business, you will still need to register your business. Before registering your business, you will have to keep a suitable name for the business.

Selection of a strategic office space and a spacious workshop for the sheet metal or fabricating business is also very important. You will need skilled manpower and latest equipments to counter any customer challenge. Most of these businesses have faced hardships in the initial years, but after few years, things begin to fall in place.…

7 Central Principles of Personal Mastery

Principles behind personal and self mastery are actually fundamental concepts that are essential when building professional, social, interpersonal, and spiritual relationships. The first principle stresses being aware of how you define success. In personal mastery, along with its central component of emotional mastery, internal change, in the here-and-now is actually more important than what has happened in your past.

Personal mastery is also based on how you have come to define and understand your own reality – what it is you believe about your life right now, about yourself and about others. Personal mastery is central to how you think and what you believe and the level to which you are or are not aware of your own thoughts and their effect on how you feel and even more importantly how your thoughts and feelings play themselves out with others.

7 Central Principles of Personal Mastery

  1. Set goals for yourself and take action to achieve them
  2. Be open to learning how to deal effectively with difficult and challenging situations
  3. Identify positive behaviour and feelings and validate yourself
  4. Challenge your thoughts by looking for “objective” evidence for against what you believe
  5. Let go of negativity that can keep you stuck in resentment and blame
  6. Develop and nurture an inquisitive mind-set and an attitude of gratitude
  7. Learn to ask skillful questions of yourself that will help you understand yourself better

It is important for you to invest your time in and energy on things that you can control. This means focusing on yourself and what you want to change and not focusing on trying to change or fix anyone else. It is important to let go of any proclivity to have a reactive attitude that can lead to feelings of resentment, rejection-sensitivity, negativity, blame, and shame, that are obstacles to healthy change and that can keep you stuck in repeating old and worn out patterns of relating that cause you to continue suffer. When you are invested in suffering, it is suffering that you master. Not personal self and emotional mastery.

Another principle behind self mastery is understanding that what happens to in your life is based on your own choices – accepting personal responsibility is the way to create change moving forward in your life. Decisions about your life need to be made by you in a conscious and aware way. A proactive way. Not a reactive way.

Having a clear vision of what you want and what you need to learn more about to achieve your goals is also very central to building your personal mastery. After identifying your goals it is important to create a plan of action that will help you to achieve your goals. Taking action steps toward the achievement of your goals is the way to apply your vision, values, and principles to your self-improvement, emotional and personal mastery. Mastery means you are continuing to build and strengthen your emotional, psychological, and psychosocial competence.

Overall, an individual who actively engages his or her own process of …