Executive Summary

This assignment shows a description of short-term financial instruments in corporate finance. First of all, the aim is not to point out the main differences between short term, and long term financial instruments. The present report describes an overview of financial planning, statement, and models, furthermore it will handle with working capital management and its importance according to corporate finance, always tried in ac-cording to short term financial issues. These introductory explanations are supplemented by an overview of short term assets and liabilities. To be continued it will give a sum up of the characteristics in interim financing and short term finance decision mak- ing.

Table of Content

Executive  Summary  I

Table of  Content  II

List  of Figures.  III

1  Introduction  1

2  Financial Planning, statement, and models.  2

3  Corporate finance  4

3.1  Working capital, and management  4

3.2  Short term assets  4

3.2.1  Instruments for short term balance sheet  5

3.3  Current Liabilities  7

4.  Interim financing "short term decision making"  8

4.1  Options for short term financing.  9

4.1.1  Bank loans  9

Conclusion   10

Appendix Integral  Total Management Checklist.  XI

Bibliography   XIII

II

List  of Figures  

Figure  1: Financial planning  

III

1 Introduction

Most of Company strategic management actions, respectively financial planning, are dedicated to long term financial decisions. Firms need to know how, and what to invest in working capital, plant, and equipment that is required for organizational success, and expansion. The necessity of predefining a company’s future economic viability, and course of action for several years are requiring a stabile capital structure ¹ Effective long-term financial planning and good budget management is a mostly more or less heavy-handed and not easily reversed process ² . On the other Hand companies have to struggle with sudden negative economic impulses in context with a company’s progress that will need immediate response. For that reason short term financial planning and instruments are available to overcome such a period.

To be repeated, the aim of this assignment is to show the overall picture of short term financial instruments and its importance regarding financial planning as a whole. Fur-thermore it will try to describe the criteria’s for short term decision making, focus on a specific instrument of short term financing, named bank loans.

¹ See: Brealey, Myers, Allen (2007), p.801

² See: Brealey, Myers, Allen (2007), p.787

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