Click to edit Master title style(英文版)(ppt 30頁)

Click to edit Master title style(英文版)內容提要：
Is SKI inefficient or just conservative?
A conservative (relaxed) policy may be appropriate if it leads to greater profitability.
However, SKI is not as profitable as the average firm in the industry. This suggests the company has excessive working capital.
Cash doesn’t earn a profit, so whyhold it?
1.Transactions: Must have some cash to operate.
2.Precaution: “Safety stock.” But lessened by line of credit, marketable securities.
3.Compensating balances: For loans and/or services provided.
4.Speculation: To take advantage of bargains, to take discounts, etc. Reduced by credit lines, securities.

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