FINC 331-WEEK 7: Cash Collections

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Cash Collections

1. Consider cash collection items. How can a firm minimize this time and what are some of the costs? Do we worry about this as individuals as well? If so, how?

(Excellent presentation on Cash Management and various ways companies can increase cash collections.
(

Cash Management by Dr Chitkara

)
(

PDF file of the article is posted in Content – Week 7 – Articles for Discussion Week 7.

)

2. How can capital structure decisions affect the control of a firm? In other words, would the control issues impact your decisions on how to raise money for your company?

3. How can sales be used to develop pro forma financial statements?

(Excellent video on Proforma Financial Statements and Preparing a Statement of Cash Flows:

)

UMGC (n.d.). Retrieved from https://leocontent.umgc.edu/content/umuc/tus/finc/finc331/2228/additional-

resources/working-capital-management.html

Module 3-Working Capital Management

Having examined the capital budgeting process, the main process by which the firm selects

which long-term investments to undertake to best position itself for the future, we now shift to

examining the firm’s decisions regarding short-term investments, or working capital.

Working Capital Definition and Objectives

Working Capital Definition

As explained earlier in our discussion of financial reporting, a firm’s working capital is defined

technically as its current assets. Working capital as it is technically defined is, however, seldom

used alone in financial management because it ignores current liabilities, which can offset in part

the current asset financing requirements. Net working capital (current assets – current liabilities)

is what is usually used in financial management. Unfortunately, in practice the two terms are

frequently used interchangeably, with the net working capital meaning being understood.

Working capital, or short-term capital, differs from fixed capital, or long-term capital, primarily

in the time it takes the firm to recover the initial investment in assets. Consider that fixed capital

and long-term assets [plant, property, and major equipment (PP&E)] generally require years to

recover the (capital) investment, whereas working capital expenditures (receivables, payables,

inventories, and so forth) are normally recovered many times in a single year via normal turnover

of the firm’s products and services. The accounting definition of the time difference between

short-term and long-term is one year. Specifically, if the asset will be converted to cash or the

liability paid within one year from the date of report, it is a short-term investment.

Working Capital Management Objectives

Theoretically, the ideal financial objective in managing working capital is to maintain the net

working capital balances (current assets – current liabilities) at that optimum level where the

marginal benefit to be received from that next dollar of working capital would not be equal to the

marginal cost of the next dollar.

In practice, the management objective is usually much simpler. A typical working capital policy

might be to minimize net working capital (i.e., minimize current assets and maximize current

liabilities) to the point where the actions undertaken do not create undue operational constraints,

such as stock outs or bad debt write-offs, or provide the competition a competitive advantage via

better trade terms or faster delivery. Other working policies or rules of thumb might include (1)

making every effort to offset current asset funding requirements with current liability financing

or (2) minimizing net working capital to free up all available cash for more lucrative investment

or to avoid financing costs.

https://leocontent.umgc.edu/content/umuc/tus/finc/finc331/2228/additional-resources/working-capital-management.html

https://leocontent.umgc.edu/content/umuc/tus/finc/finc331/2228/additional-resources/popups/topic3-workncaptl.html

Working Capital Components and Objectives

As discussed earlier, working capital consists of two categories, both of which are balance sheet

items—current assets and current liabilities. The art and science of working capital management

is balance.

Current Assets Management Objectives

Current assets represent the use of cash by the firm to procure short-term assets, either by

purchasing for future use (prepaid and inventory) or by delaying receipt of payments due for

products and services sold (accounts received). Where possible, the firm wants to minimize these

purchases and avoid extending trade terms to its customers. Recall that current assets consist of

the following accounts:

• cash and marketable securities

• accounts receivable

• inventory

• prepaid expense

Current Liabilities Management Objectives

Current liabilities represent a source of cash to the firm, generally obtained by authorized

delayed payment for goods and services received. Where possible, the firm wants to maximize

these account balances. Recall that current liabilities consist of the following accounts:

• accounts payable

• accrued liability

• taxes payable

• notes payable

The following are the four working capital accounts that receive the most scrutiny from financial

managers, along with the working capital manager’s objective for controlling each account:

1. cash interest—invest all excess cash in safe short-term investments to earn some interest

2. accounts receivable—collect all trade receivables to

terms

3. inventory—minimize raw material, in-process, and finished goods inventory

4. accounts payable—maximize all trade credit terms offered by suppliers

The Importance of Working Capital and Its Management

The Operational Requirements

A firm must have working capital to operate efficiently and to survive in a flexible and

competitive market. On average, for manufacturing companies, current assets represent

approximately 40 percent of the company’s total assets. For wholesale and distribution

companies, working capital represents 50–60 percent of total assets. Why the difference?

Consider the weighting effect of manufacturing’s higher requirement for capital assets, which

results in higher total assets in the denominator of the equation.

Combined, on average, U.S. companies spend 15 cents of each sales dollar for working capital.

With this level of spending, proper control of working capital is critical for efficient business

management.

Externally, working capital is also considered critical tbyo the firm’s investors, analysts,

creditors, and suppliers, all of whom are concerned about getting their money back. Finally,

many consider working capital to be a measure of the firm’s risk, and therefore, it affects directly

the company’s ability to raise financing and the interest charged, on that financing. Many loan

agreements require maintaining either a minimum level of working capital or valid working

capital relationships. Remember the current ratio and acid test ratio for liquidity.

In most businesses, the finance or treasury departments usually have primary responsibility for

setting or controlling working capital policy. This is a difficult task because no single business

function is directly responsible for all aspects of working capital, and the functions are often at

odds on the objectives resulting in many trade-offs. For example, the sales function often wants

easy credit terms to gain sales, and the finance function wants tight credit terms to conserve cash.

The manufacturing function wants low inventory to save storage and handling costs, whereas the

sales function wants high inventories for quick response to customer orders.

Operational Exposures Inherent in Working Capital

Too low a level of working capital can be harmful and place the firm in a noncompetitive

situation. For example:

• if inventory is too low, it can result in a stock out and sales lost to the competition

• if receivables are too low, the firm can lose customers to the competitor that has better

terms

Too high a level of working capital can also be harmful and place the firm at a disadvantage in

capital financing. For example:

• if receivables are too high, the firm must obtain more financing to cover cash shortages

• if inventories are too high, the firm must obtain more financing to cover costs

Working Capital Policy Considerations

Remember, the objective of working capital management is to determine the proper aggregate

amount and composition of all the components of working capital. Working capital management

is a balancing act between profitability and risk. This risk-profitability trade off is shown below:

• Higher working capital equals decreases in both profitability and risk.

• Lower working capital equals increases in both profitability and risk.

In most companies, working capital management concentrates on the following working capital

actions:

• setting minimum levels for cash

• investing all excess cash in short-term marketable securities

• controlling accounts receivable by policy, terms, and collection

• controlling inventory by setting inventory levels and controls

• controlling accounts payable by setting payment policies

• using notes payable to assure adequate cash availability

Note that taxes payable, although a working capital item, is usually managed separately based on

the company’s tax position and strategy.

NAGEMENT
OF

CASH

Dr. Neeraj Chitkara

Assistant Professor

Samalkha Group of Institutions

Email- neer.chitkara@gmail.com

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INTRODUCTION

Cash is the most liquid asset. Cash is common
denominator to which all other current assets can
be reduced because receivables and inventories
get converted into cash. Cash is lifeblood of any
firm needed to acquire supply resources,
equipment and other assets used in generating the
products and services. Marketable securities also
come under near cash, serve as back pool of
liquidity which provide quick cash when needed.

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MANAGEMENT OF CASH

Although cash is only 1-3% of total current assets but
its management is very important.

Management of cash includes:

 Determination of optimum amount of cash required
in the business.

 To keep the cash balance at optimum level and

investment

of surplus cash in profitable manner.

 Prompt collection of cash from receivables and
efficient disbursement of cash.

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MEANING OF CASH
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 For the purpose of cash
management, the term
cash not only includes
coins, currency notes,
cheques, bank draft,
demand deposits with
banks but also the near
cash assets like
marketable securities and
time deposits with bank
because they can readily
converted into cash.

CASH

Narrow Sense

Cash in Hand i.e.
currency notes &

coins

Broader Sense

Cash & its
equipment i.e. cash
at Bank, short term

investment

MOTIVES FOR HOLDING CASH

In business cash is needed for the following motives:

 Transaction Motive :
i.e. to purchase raw material & to pay for operating expenses

 Precautionary Motive :
to meet the future contingencies such as :

o Floods, strikes and failures of important customers
o Bills may be presented for settlement earlier than expected
o Unexpected slow down in collection of accounts receivables
o Cancellation of some order for goods as the customer is not satisfied
o Sharp increase in cost of raw materials

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 Speculative Motive : The speculative
motive helps to take advantages of:

 An opportunity to purchase raw materials at a
reduced price on payment of immediate cash.

 A change to speculate on interest rate
movements by buying securities when interest
rates are expected to decline.

 Delay purchase of raw materials on the
anticipation of decline in prices.

 Make purchase at favorable prices.

 Compensating Motive :
Yet another motive to hold cash balances is to
compensate banks for providing certain services
and loans.

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OBJECTIVES OF CASH MANAGEMENT

To maintain optimum cash balance.

To keep the optimum cash balance
requirements at minimum level by prompt
collection & late disbursement etc.

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FACTORS TO BE CONSIDERED WHILE DETERMINING
THE OPTIMUM

CASH BALANCE

Synchronization of cash flows.
Cash shortage costs.
Excess cash balance costs.
Procurement and management costs.
Compensating balance.
Uncertainty.
Firm’s capacity to borrow in emergence.
Efficiency of Management

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CASH

SYSTEM

The cash system of a firm is the
mechanism that provides the linkage
between cash flows. The financial
manager of the firm has the
responsibilities, at least in part, of
developing and maintaining the policies
and procedures necessary to achieve an
efficient flow of cash for the firm’s
operations.

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ELEMENTS OF CASH
SYSTEM

EXTERNAL

COLLECTION
DISBURSEMENT

INTERNAL

CONCENTRTION
DISBURSEMENT

FUNDING

Concentration
BankDeposit 2

Deposit 1

Deposit 3

Disbursement
Bank 1

Disbursement
Bank 2

ELEMENTS OF CASH SYSTEM

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FLOATS
The amount of money tied up in

cheques that have been written but yet
to be collected and encasheed.

Types of Floats
1.

Collection Float

It refers to the total time gap between
the mailing of the payment by the
payer and the availability of cash in
bank.

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2. Mail Float :
It results from the time that elapse
from the mailing of cheque until it
receipt.

3. Processing Float:
It is due to the processing time before
the cheque is deposited into the
bank.

4. Availability Float :
It includes the time gap which is
consumed in the clearance of
cheque.

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Payer
Makes

Payment

Company
Receipts
Payment

Funds
Available

Availability
Delay

Processing
Delay

Mail Delay

Availability
Float

Processing
Float

Mail Float

Company
Deposits
Payment

Collection Float

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MANAGING THE CASH FLOWS

The task of managing the cash flows is of two fold i.e.

Acceleration cash collections:
 Establishment s of collection centers.

 Lock box systems.

Slowing Disbursements:
 Avoidance of early

payments

 Centralized disbursements

 Float ( payments through cheques)

 Accruals

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DESIGNING OF A COLLECTION SYSTEM

Numbers of collection points

Location of Collection point

 Internal and external operations of collection
point

Assignment of individual payers to collection
point

Capture and movement of information’s
about the payment

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OPTIMIZING COLLECTION SYSTEM

Reducing floats costs by speedy availability of
cash in banking system

Reducing operating cost of collection system

Reducing operating cost of managing the
system

Reducing mail floats

Reducing processing floats

Reducing availability floats

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TYPES OF COLLECTION SYSTEMS

 Over the counter collection
It is the system where the payment is received in face
to face meeting the customers. Mostly retail or
customer business receive full or at least some part of
their payments on the over the counter basis. Since
payments are not mailed, an over the counter system
does not contain mail float.

Basic Components
It includes the field unit at which the payment
is received, a local deposit bank that serve as
the entry point for the firms banking system
and an input into the firms central information
system.

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Cash Flow time line for an Over The Counter Collection

System

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Customer
Delivers

payments

Deposit
Made at

Local Bank

Availability
granted

Availability
Float

Processing
Float

Components of A Collection System for

Over The Counter Receipts

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Customer

Field Unit

Local
Deposit
Bank

Central
Information

System

DESIGNING THE SYSTEM FOR OVER THE

COUNTER

COLLECTION

 Types of Payment accepted

 Field Office Location

 Selection of deposit Banks

 Bank Compensation

 Information gathering

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(II) MAILED PAYMENT COLLECTION SYSTEM

Many companies receive payments through cheques
mailed by customers in response to an invoice. A
mailed payment system contains all three
components of collection float i.e. mail float,
processing float, float & availability float.

Basic Components
It consists of collection centers, deposit banks and an

information system. Payments are mailed by
customers to a designated collection centre
operated by company or by an outside agent.
Payments are processed at collection centre;
cheques are encoded; the deposit is prepared and
made and the data are transmitted to the
companies information system.

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Customer
Group I

Payment
mailed

Customer
Group II

Customer
Group III

Customer
Group IV

Payment
mailed

Collection
Center I

Collection
Center II

Deposit
Bank I

Deposit
Bank II

Central
Information

System

DESIGNING SYSTEM FOR MAILED PAYMENT

COLLECTION

 Number of collection points

 Collection point location

 In house v/s external operation (self collection or by
external party)

 Payer assignment ( allotment of collection point to
customers)

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OTHER COLLECTION SYSTEMS

 Pre authorized payments:

Pre authorized cheques, drafts etc. are
sometimes used when the payment amount and
payment dates are specified in advance. On the
agreed date the payee initiates the value transfer
from the payer through the banking system. This
collection system eliminates the mail float, reduce
processing and availability and improve both parties
forecasting ability.

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LOCK BOX SYSTEM

A lock-box is a post office box number to which
some or all the firm’s customers are instructed to
send their cheques. The firm grants permission to
its bank to take these cheques and immediately
send them in the clearing process.

In lock-box location analysis the following
areas should be taken into mind:

 Determining customer zone.

 Obtaining bank cost data

 The cost of floats

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CASH CONCENTRATION STRATEGIES

A Concentration bank is simply a bank designated by
the firm to perform three main tasks:

1. Receive deposits from banks in the firms
collection system.

2. Transfer funds to the firms disbursement banks.

3. Serve as the local point for short-term credit and
investment transactions.

It is useful for the firms to collect the deposits from lockbox
banks to central bank account. This process of
collecting funds is called cash concentration.

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ADVANTAGES OF

CONCENTRATION

1. The collection process results in a larger pool of
funds that makes any temporary interest earning
investment more economical.

2. With all the cash in the central location, control
over the cash is simplified.

3. It simplifies short-term financing and investment
decisions.

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Short term
Borrowings/
Investment

Concentration
Bank

Deposit
Bank III

Deposit
Bank II

Deposit
Bank I

Disbursement
Bank II

Disbursement
Bank I

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OBJECTIVES FUNCTIONS OF CASH

CONCENTRATION

Minimize opportunity cost of excess
balance.

Minimize transaction cost.

Minimize administrative cost of maintaining.

Minimize cash control cost.

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Types of
Concentration

System

Field Banking
System

Lock Box System

Collect Mailed
Deposits

Collect Cash &
Other otc
deposits

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Features Field System Lock-Box System

No. of Banks Usually many Few

Bank Size Small Large

Source of Deposits Over the counter collections Mail Payments

Geographical Bank should be near to
collection centre

Bank can be any where

Size of Deposits Small Large

Types of Deposits Cash & Cheques Only Cheques

Availability Usually Immediate Often delayed by
availability scheduled

Information from
Banks

Monthly Statements Daily

Service Offered Cash deposits & Transfer Wide variety, sometimes
credit also

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DISBURSEMENT SYSTEM

It includes the banks, delivery mechanism and
procedures the firms used to facilitate the movement
of cash from the firm’s centralized cash pool to
disbursement banks and then suppliers.

Disbursement banks are bank upon which disbursement
cheques are drawn. It may be more complex than
collection system. It generally falls under more direct
control of head Quarters.

The concentration bank serve as value between firm’s
collection system, liquidity portfolio and disbursement
bank.

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OBJECTIVE FUNCTIONS OF DISBURSEMENT

SYSTEM

 Maximum value of disbursement floats

 Minimum loss of discount for early payment

 Minimum transaction cost, Information costs,
Administration cost & control costs.

 Maximum Value of Payee relation.

 Centralized disbursement.

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From
Liquidity
Portfolio

From
Collection
System

Concentration
Bank

Cheques
Clearing
System

Disbursement
Bank I

Cheques
Clearing
System

Disbursement
Bank II

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TYPES OF DISBURSEMENT DECISIONS

Strategic Decisions

 Selection of Disbursement banks

 Selection of concentration bank

 Disbursement payment and account funding
mechanism

 Level of authority for authoring disbursement

 Policies for determining when and how much to pay

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Tactical Decisions

 Disbursement authorization

 Funding amount and time

 Payment preparation and release

 Drawee bank selection

 Mail Point

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DISBURSEMENT TOOLS

Commercial banks and other provides offer a number of
tools and assist managers in designing efficient
disbursement system.

1. Zero Balance System :
It is the common strategy for funding disbursement as
the cheques are presented. In this strategy an account
for disbursement is first established at a bank. For the
effectiveness, the participatory bank must be one on
which most disbursements are made via the clearance
system ( only in the morning) and not the bank where
disbursement occurs throughout the day. The banks
used in zero balance strategies are usually branches
of major banks but not at the main locations.

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CLEARANCE PROCESS

As implied by name firm don’t Keep any permanent
stock of cash in this account. Instead the
participatory bank agrees that when the morning
disbursement for firm presented to it, bank will
advise to the firm of the amount of cash required to
these disbursements. The money will then be wire
transferred into the zero balance account and the
cheques will be honoured. In this way the
disbursing firm’s cheques are honoured as they are
presented, but the firm does not tie up cash while
the cheques are in mail and while they are clearing.

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CONTROLLED DISBURSEMENT

If the zero balance system is not feasible, an other is the use
of controlled disbursement which is often used when the
firm’s disbursement bank receives cheques for clearance
throughout the day. In this system, the firm projects the
amount of cheques to arrive each day at the disbursement
bank and transfers the amount of expected cheques to the
account on that day or just before. Of course, the firm does
not know what outstanding cheques will be presented on
any particular day; to hedge the uncertainty the firm keeps
a safety stock of cash in this account. The amount of
safety stock may be calculated if the probability distribution
of disbursement is known.

In this system the firm also uses the bank overdraft
facility.

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INVESTMENT IN

MARKETABLE SECURITIES

The management of investment in marketable
securities is an important financial management
responsibility because of the close relationship in
between cash and marketable securities. Once the
optimum level of cash is determined the residual of
its liquid assets is invested in marketable securities.

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SELECTION CRITERIA

The choice of cash and investment mix is based on
tradeoff between opportunity to earn a return on
idle fund during holding period and brokerage cost
associated with purchase and sale of securities.
The following points must be consider before
selecting the securities:

 Financial / default risk
 Interest rate risk
 Taxability
 Liquidity
 Maturity
 Yield available

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MARKETABLE SECURITIES

 Treasury bills

 Certificate of deposits

 Commercial papers

 Repurchase agreement

 Inter corporate deposits and bills discounting

 Call market instruments

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DETERMINATION OF THE OPTIMUM LEVEL OF

CASH BALANCE

In order to invest the excess funds the financial manager
must know the minimum amount that must cyclical
requirements make it difficult to ascertain the amount of
exactly. A range of cash models which help the financial
manager to estimate the cash requirements are
discussed below:

BAUMOL MODEL

In this model the firm is assumed to receive cash
periodically but has to pay out cash continuously at a
steady rate i.e. the firm’s inflows are lumpy but its
outflows are not. When a firm receive cash, the firm puts
enough cash in its disbursement account to cover
outflow until the next inflows is received.

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A

J C
H

IT
K

A
R

ASSUMPTIONS

 Investment will yield a fixed rate of return per period
regardless of the length of investment

 Transaction cost of investing and disinvesting is a
fixed cost i.e. independent of the amount of
investment.

Appropriate strategy for investing the funds until
they are needed:

 Two transaction strategy

 Three transaction strategy

D
r. N

E
E

R
A

J C
H

IT
K

A
R

TWO TRANSACTION

STRATEGY

 When the cash inflows is received, Invest one half of
the total inflow, put the remaining one half in the
Disbursement Account.

 During the first half of period, Pay Disbursements
from the disbursement account. This account will be
drained one half of the way through the period. At
that time sell the investments and place the resulting
funds in the disbursement account.

 Use these funds to pay disbursements during the
remainder of the period.

 Investment Income= (1/2)(1/2)iy

 Profit=(1/4)iy-2a

D
r. N

E
E

R
A

J C
H

IT
K

A
R

THREE TRANSACTION STRATEGY

 When the cash inflows is received, Initially invest Two-
Third of it. Place the remaining One-Third in the
disbursement account.

 One-Third of the way through the period, The
disbursements account will be exhausted. At this time,
disinvest half of the funds in the investment account(
The amount is (1/2)(2/3)y=(1/3)y and put this in the
disbursement account. Leave the remaining(1/3)y in the
investment account and move the proceeds to the
disbursement through the remainder of the period.

 Interest Income=(2/3)(1/3)iy+(1/3)(1/3)iy=(1/3)iy

 Profit=(1/3)iy-3a

D
r. N

E
E

R
A

J C
H

IT
K

A
R

NUMBER OF TRANSACTIONS

 N=(iy/2a)1/2

Limitations
 Return is not same in all Markets.

 Transaction cost is not always fixed but varies.

 Limited use.

D
r. N

E
E

R
A

J C
H

IT
K

A
R

THE BERANEK MODEL

 Bernak hypothesized that firms where the cash
inflows were steady, but the outflows were periodic.

 This is mirror image of the time pattern of cash
flows with in the baumol model, where inflows were
periodic and outflows were steady.

 The challenge is to profitability invest the funds
between the time of the receipt and at the time
when a group of cheques are presented to the bank
for payments.

D
r. N

E
E

R
A

J C
H

IT
K

A
R

THE MILLER-OOR MODEL

 Miller-OOR Model incorporate uncertainty explicitly
with in the strategies which they derive.

 The major deference between the miller-oor model
and the prior two models concerns the assumed
time pattern of cash flows.

D
r. N

E
E

R
A

J C
H

IT
K

A
R

ASSUMPTIONS

 Cash flows are normally distributed.

 Firm has minimum required cash balance at a
particular time.

 There is no auto correction in cash flow.

 The standard deviation of cash flows never change
for a long time.

D
r. N

E
E

R
A

J C
H

IT
K

A
R

CONTROL-LIMITS APPROACH

 The miller-oor cash management model is basically
an application of control –limits theory to the cash /
investment decision. Control-limit are set up using
the formula derived by miller-orr.

 When the firms total cash goes outside the upper
control limit, investment are made to bring the cash
balance back down to the return point.

 If below the lower control limit, disinvestment are
made.

D
r. N

E
E

R
A

J C
H

IT
K

A
R

FORMULA

 R=(3av/4i)1/3

 If L is the lower control limit ( Set by management,
the optimal return point is R+L.

 The optimal Upper Control is 3R+L.

 A=transaction cost, V=variance of daily cash flows,
I=daily interest rate on investment.

D
r. N

E
E

R
A

J C
H

IT
K

A
R

LIMITATIONS

 Cash Flows can not be same.

 Rate of Interest can not be same.

D
r. N

E
E

R
A

J C
H

IT
K

A
R

STONE MODEL

 Like the Miller-OOR Model, the Stone Model takes
a control limit approach, but in stone model the
signal does not automatically result in an
Investment or Disinvestment.

 The recommended action depends on the
management’s estimates of future cash flows : that
is the model signals an evaluation by management
rather than an action.

 To do this stone model uses two sets of control
limits, the inner control limits (n ULC, LCL1) and the
outer control Limits ( UCL2, LCL2).

D
r. N

E
E

R
A

J C
H

IT
K

A
R

ASSUMPTIONS

 Firm has minimum required cash balance.

 Firm has some knowledge of future cash flows. Out
of this knowledge contains an error component.

D
r. N

E
E

R
A

J C
H

IT
K

A
R

STRATEGY

 The firm performs an evaluation until its cash
balance falls outside the outer control limits.

 When this occurs, the firm looks ahead by adding
the expected cash flows for the nest few days to the
current balance.

 If the sum of the current balance and these
expected future cash flows ( which is expected
cash balance a few days hence) Falls outside the
inner control limits, A transaction is made,
otherwise, the transaction is foregone.

D
r. N

E
E

R
A

J C
H

IT
K

A
R

Chapter 17 “Introduction to Working Capital” from Finance by Boundless is used under the terms of
the Creative Commons Attribution-ShareAlike 3.0 Unported license. © 2014, boundless.com. UMGC
has modified this work and it is available under the original license

UMGC—- Retrieved from https://leocontent.umgc.edu/content/dam/equella-content/finc331/Chapter17IntroductiontoWorkingCapital

a
p
te
r
17

In
tr
od

uc
tio

n
to

or
ki
ng

C
ap

ita
l

ht
tp
s:
//
w
w
w
.b
ou

nd
le
s

.c
om

/
na

nc
e/
in
tr
od

uc
tio

–

to
-w

or
ki
ng

–

p
ita

C
al
cu

la
tin

W
or
ki
ng

C
ap

ita
l

C
on

tr
ol
lin

th
e

C
om

p
on

en
ts

of
W
or
ki
ng

C
ap

ita
l

Im
p
or
ta
nc

e
of

W
or
ki
ng

C
ap

ita
l

Se
ct
io
n
1

W
or
ki
ng

C
ap

ita
l

85
3

ht
tp
s:
//
w
w
w
.b
ou

nd
le
ss
.c
om

/
na

nc
e/
in
tr
od

uc
tio

n-
to
-w

or
ki
ng

-c
ap

ita
l/

or
ki
ng

-c
ap

ita
l/

C
al
cu

la
tin

g
W
or
ki
ng

C
ap

ita
l

W
or
ki
ng

C
ap

ita
l=

rr
en

t
as

se
ts

–
cu

rr
en

lia
b
ili
tie

K
E
Y
P
O
IN
TS

•
W
C
is

cu
rr
en

as
se

ts
m
in
u
s
cu
rr
en
t

li
ab
il
it
ie
s.

C
o

m
p
an

ie
s

w
an
t
p
os
it
iv
e
W
C
.

•
W
C
i

s
an

si
gn
al
of
w
h
et
h
er
or
n
ot
th
e
co
m
p
an
y

h
as

en
ou
gh

as
se
ts
to
tu
rn
in
to

ca
sh

p
ay

u
p
co
m
in
g
ex

p
en

se
s

or
d
eb

ts
.

•
W
C

is
a

m
ea

su
re
m
en

t
of

li
qu
id
it
y

an
d

is
n
ot
a
gu
ar
an
te
e

th
at

a
co

m
p
an
y
ca
n
p
ay

fo
r

it
s
li
ab
il
it
ie
s.

W
or
ki
n

g
ca

p
it
al
(W
C
)
is
a
fi
n
an
ci
al
m
et
ri
c
w
h
ic
h
re
p
re
se
n
ts

op
er
a

t
in

g
li
qu
id
it
y
av
ai
la
bl
e
to
a
bu
si
n
es
s,
or
ga
n
iz
at
io
n
,o
r
ot
h
er

en
ti
ty
,i
n
cl
u
d
in
g
go
ve
rn
m
en
ta
le
n
ti
ty
.A
lo
n
g
w
it
h
fi
xe
d
as
se
ts
,s
u
ch

as
p
la
n
t
an
d
eq
u
ip
m
en
t,
w
or
ki
n
g
ca
p
it
al
is
co
n
si
d
er
ed
a
p
ar
t
of

op
er
at
in
g
ca
p
it
al
.

W
or
ki
n
g
ca
p
it
al
ca
n
be
fo
u
n
d
th
ro
u
gh
th
e
fo
ll
ow
in
g
fo
rm
u
la
:

W
C
=
C
A
-C
L
(W
or
ki
n
g
C
ap
it
al
=
cu
rr
en
t
as
se
ts
–
cu
rr
en
t
li
ab
il
it
ie
s)

C
u
rr
en
t
as
se
ts
(C
A
)
is

an
ac

co
u
n
ti
n
g

te
rm

th
at
re
fe
rs
to
as
se
ts
th
at

ca
n
ea
si
ly
be
tu
rn
ed
in
to
ca
sh
.F
or

ex
am

p
le

,c
as
h
is
a
cu
rr
en
t
as
se
t,

bu
t
so
ar
e
m
os
t

ac
co

u
n
ts

re
ce

iv
ab

le
.

C
u
rr
en
t
li
ab
il
it
ie
s
(C
L
)
is
an
ac
co
u
n
ti
n
g
te
rm
si
m
il
ar
to
C
A
:C
L
is

th
e
am
ou
n
t
of
li
ab
il
it
ie
s
th
at
ar
e
ex
p
ec

te
d

to
be
se
tt
le
d
in
ca
sh

w
it
h
in
a
ye
ar
(o
r
th
e

op
er
at
in
g
cy

cl
e
of
th
e
co
m
p
an
y)
.

T
h
e
d
if
fe
re
n
ce
be
tw
ee
n
th
e
tw
o
(W
C
)
is
a
m
ea
su
re
m

en
t
of

li
qu
id
it
y.

It
si
gn
al
s
w
h
et
h
er
or
n
ot
th
e
co
m
p
an
y
h
as
en
ou
gh
as
se
ts
to
tu
rn

in
to
ca
sh
to
p
ay
of
fu
p
co
m
in
g
li
ab
il
it
ie
s.
It
is
n
ot
a
p
er
fe
ct
si
gn
al
,

h
ow
ev
er
.

Si
n
ce
m
os
t
ex
p
en
se
s
an
d
d
eb
t
m
u
st
be
p
ai
d
in
ca
sh
(F
ig
u
re
17
.1
),

h
av
in
g
p
os
it
iv
e
W
C
sh
ow
s
th
at
th
e
co
m
p
an
y
h
as
th
e
ab
il
it
y
to
p
ay

of
fe
xp
en
se
s
an
d
d
eb
t
th
at
w
il
la
ri
se
or
co
m
e
d
u
e
in
th
e
sh

or
t-

te
rm

W
C
,t
h
ou
gh
,d
oe
s
n
ot
gu
ar
an
te
e
th
at
a
co
m
p
an
y
ca
n
p
ay
of
fa
ll

sh
or
t-
te
rm
ex
p
en
se
s
or
li
ab
il
it
ie
s.
Si
m
p
ly
h
av
in
g
p
os
it
iv
e
W
C
d
oe
s

85
4

M
os

t
p
ur
ch

as
es

in
cl
ud

in
g
fo
od

,
m
us

t
b
e
m
ad

e
w
ith

a
sp

ec
i
c
as

se
t–

ca
sh

.N
ot

al
lc

ur
re
nt

as
se

ts
ca

n
b
e
us

ed
to

p
ay

o
ex

p
en

se
s

of
d
eb

ts
.

Fi
g
ur
e
17

.1
B
uy
in
g

Fo
od

n
ot
m
ea
n
n
ec
es
sa
ri
ly
th
at
a
co
m
p
an
y
w
il
lb
e
ab
le
to
p
ay
of
fa
ll

ex
p
en
se
s.
Su
p
p
os
e
th
at
a
co
m
p
an
y
h
as
cu
rr
en
t
as
se
ts
of
$
10
0
:$
20

of
ca
sh
an
d
$
8
0
of
ac
co
u
n

ts
re
ce

iv
ab
le
.T
h
ey
al
so
h
av
e
$
50
of

cu
rr
en
t
li
ab
il
it
ie
s.

T
h
at
m
ea
n
s
th
at
th
ey
h
av
e
W
C
of
+
$
50
.O
n
e
of

th
ei
r
ac
co
u
n

ts
p
ay

ab
le
co
m
es
d
u
e
to
m
or
ro
w
,s
o
th
e
co
m
p
an
y
ow
es

$
40
.T
h
ey
h
av
e
$
20
of
ca
sh
on
h
an
d
,b
u
t
ca
n
‘t
ge
t
th
e
ot
h
er
$
20
by

to
m
or
ro
w
be
ca
u
se
th
ey
ca
n
‘t
co
ll
ec
t
$
20
of
ac
co
u
n
ts
re
ce
iv
ab
le
by

to
m
or
ro
w
.T
h
e
co
m
p
an
y
ca
n
n
ot
p
ay
a
sh
or
t-
te
rm
ex
p
en
se
,e
ve
n

th
ou
gh
a
p
os
it
iv
e
W
C
sa
ys
th
at
th
e
co
m
p
an
y
sh
ou
ld
be
ab
le
to
p
ay

of
fm
os
t
ex
p
en
se
s
an
d
lo
an
s
in
th
e
sh
or
t-
te
rm
.

W
C
is
n
ot
a
gu
ar
an
te
e
th
at
th
e
co
m
p
an
y
w
il
lh
av
e
en
ou
gh
ca
sh
fo
r

ea
ch
ex
p
en
se
,m
er
el
y
th
at
th
ey
h
av
e
op
er
at
in
g
li
qu
id
it
y.

So
u
rc
e:
ht
tp
s:
//
w
w
w
.b
ou
n
d
le
ss
.c
om
/f
in
a
n
ce
/i
n
tr
od
u
ct
io
n
-t
o-

w
or
ki
n
g
-c
a
p
it
a
l/

w
or
ki
n
g
-c
a
p
it
a
l/
ca
lc
u
la
ti
n
g
-w
or
ki
n
g
-c
a
p
it
a
l/

C
C
-B
Y
-S
A

B
ou
n
d
le
ss
is
a
n
op
en
ly
li
ce
n
se
d
ed
u
ca
ti
on
a
lr
es
ou
rc
e

C
on

tr
ol
lin
g
th
e
C
om

p
on

en
ts

of
W
or
ki
ng

C
ap

ita
l

W
or
ki
ng

ca
p
ita

l(
W
C
)c

an
b
e
co

nt
ro
lle
d
b
y
ch

an
gi
ng

th
e

le
ve

ls
of

cu
rr
en

t
as

se
ts

an
d
/o
r
cu

rr
en

t
lia
b
ili
tie

s
th
ro
ug

h
a
nu

m
b
er

of
m
ec

ha
ni
sm

K
E
Y
P
O
IN
TS

•
In
cr
ea
si
n
g
cu
rr
en
t
as
se
ts
or
d
ec
re
as
in
g
cu
rr
en
t
li
ab
il
it
ie
s

in
cr
ea
se
s
W
C
,a
n
d
vi
ce
ve
rs
a.

•
F
ou
r
co
m
m
on
m
ec
h
an
is
m
s
fo
r
co
n
tr
ol
li
n
g
W
C
ar
e
ca
sh

m
an

ag
em

en
t

in
ve

n
to
ry
m
an
ag
em
en
t,
d
eb

to
rs

m
an
ag
em
en
t,

an
d
fi
n
an
ci
n
g
m
an
ag
em

en
t.

•
H
av
in

g
to

o
li
tt
le
W
C
im
p
ai
rs
a
co
m
p
an

y’
s

ab
il
it
y
to
m
ee
t
it
‘s

fi
n
an
ci
al
ob
li
ga
ti
on
s,
w
h
il
e
h
av
in
g
to
o
m
u
ch
W
C
ca
n
al
so
be

ba
d
be
ca
u
se
it
m
ea
n
s
th
at
th
er
e
ar
e
as
se
ts
th
at
ar
e
n
ot
be
in
g

in
ve
st
ed
in
th
e
lo
n
g-
te
rm
.

C
o
n
tr
o
ll
in
g
th
e
C
o
m
p
o
n
e
n
ts
o
f
W
o
rk
in
g
C
a
p
it
a
l

E
ac

h
co

m
p
an
y
h
as
d
if
fe
re
n
t
d
em
an

d
s

fo
r
h
ow
m
u
ch
W
or
ki
n
g

C
ap
it
al
(W
C
)
th
ey
n
ee
d
,b
u
t
al
lc
om
p
an
ie
s
p
re
fe
r
to
h
av
e
p
os
it
iv
e

W
C
(r
ec
al
lt
h
at
W
C
=
cu
rr
en
t
as
se
ts
–
cu
rr
en
t
li
ab
il
it
ie
s)
.H
av
in
g
to
o

li
tt
le
W
C
im
p
ai
rs
a
co
m
p
an

y’
s
ab

il
it
y
to
m
ee
t
it
‘s
fi
n
an
ci
al

85
5

ob
li
ga
ti
on
s.
It
is
h
ar
d
to
p
ay
ex
p
en
se
s
or
d
eb
ts
th
at
co
m
e
d
u
e
in
th
e

sh
or
t-
te
rm
.H
av
in
g
to
o
m
u
ch
W
C
ca
n
al
so
be
ba
d
be
ca
u
se
it
m
ea
n
s

th
at
th
er
e
ar
e
as
se
ts
th
at
ar
e
n
ot
be
in
g
in
ve
st
ed
.H
ol
d
in
g
to
o
m
an
y

or
t
te
rm

as
se
ts
sl
ow
s
fu
tu
re
gr
ow
th
of
th
e
co
m
p
an
y.
T
h
u
s,

m
an

ag
in
g

W
C
to
an
ac
ce
p
ta
bl
e
le
ve
li
s
on
e
of
th
e
m
os
t
im
p
or
ta
n
t

jo
bs
of
m
an
ag
em
en
t
(F
ig
u
re
17

W
C
ca
n
be
ad
ju
st
ed
by
in
cr
ea
si
n
g
or
d
ec
re
as
in
g
it
s
tw
o

co
m
p
on
en
ts
:c
u
rr
en
t
as
se
ts
(C
A
)

an
d
cu

rr
en
t
li
ab
il
it
ie
s
(C
L
).

In
cr
ea
si
n
g
C
A
or
d
ec
re
as
in
g
C
L
in
cr
ea
se
s
W
C
,a
n
d
vi
s
ve
rs
a.

M
an

ag
em
en
t
ca
n
en
ac
t
a
n
u
m
be
r
of
p
ol
ic
ie
s,
so
m
e
of
w
h
ic
h
ar
e

h
ig
h
li
gh
te
d
be
lo
w
:

•

C
as

h
m
an
ag
em
en
t:

Id
en

ti
fy
th
e
ca
sh
ba
la
n
ce
th
at
al
lo
w
s
th
e

bu
si
n
es
s
to
m
ee
t
d
ay
to
d
ay
ex
p
en
se
s,
bu
t
re
d
u
ce
s
ca
sh

h
ol
d
in
g
co
st
s.
C
as
h
is
a
C
A
.

•
In
ve
n
to
ry
m
an
ag
em
en
t:
Id
en
ti
fy
th
e
le
ve
lo
fi
n
ve
n
to
ry
w
h
ic
h

al
lo
w
s
fo
r

u
n
in
te
rr
u
p
te
d
p
ro
d
u
ct
io
n
bu
t
re
d
u
ce
s
th
e

in
ve

st
m
en

t
in

ra
w

m
at
er
ia
ls
—
an

d
m
in
im

iz
es

re
or
d
er
in
g

co
st
s

—
an
d
h

en
ce

in
cr
ea

se
s
ca

sh
fl
ow
.I
n
ve
n
to
ry
is
a
C
A
.

•
D
eb
to
rs
m
an
ag
em
en
t:
Id
en
ti
fy
th
e
ap
p
ro
p
ri
at
e
cr
ed
it
p
ol
ic
y,

su
ch
as
cr
ed
it
te
rm
s,
th
at
w
il
la
tt
ra
ct
cu
st
om
er
s,
su
ch
th
at
an
y

im
p
ac
t

on
ca

sh
fl
ow
s
an
d
th
e
ca
sh
co
n
ve
rs
io
n

cy
cl
e

w
il
lb
e

of
fs
et
by
in
cr
ea
se
d
re
ve
n
u
e
an
d
h
en
ce
R
et
u
rn
on
C
ap
it
al
(o
r

vi
ce
ve
rs
a)
.C
re
d
it
ex
te
n
d
ed
to
cu
st
om
er
s
(a
cc
ou
n
ts

re
ce
iv
ab
le
)
is
a
C
A
.

•
F

in
an

ci
n
g
m
an
ag
em
en
t:
Id
en
ti
fy
th
e
ap
p
ro
p
ri
at
e
so
u
rc
e
of

fi
n
an
ci
n
g.

Sh
or
t-
te
rm
fi
n
an
ci
n
g
(a
s
w
el
la
s
lo
n
g-
te
rm

fi
n
an
ci
n
g
th
at
co
m
es
d
u
e
in
th
e
n
ex
t
ye
ar
or
op
er
at
in
g
cy
cl
e)
is

a
C
L
.

B
y
ad
ju
st
in
g
th
es
e
fo
u
r
p
ri
m
ar
y
in
fl
u
en
ce
rs
on
C
A
an
d
C
L
,

m
an
ag
em
en
t
ca
n
ch
an
ge
W
C
to
a
d
es
ir
ab
le
le
ve

So
u
rc
e:
ht
tp
s:
//
w
w
w
.b
ou
n
d
le
ss
.c
om
/f
in
a
n
ce
/i
n
tr
od
u
ct
io
n
-t
o-

w
or
ki
n
g
-c
a
p
it
a
l/
w
or
ki
n
g
-c
a
p
it
a
l/
co
n
tr
ol
li
n
g
-t
he
-c
om
p
on
en
ts
-o
f-

w
or
ki
n
g
-c
a
p
it
a
l/

C
C
-B
Y
-S
A

B
ou
n
d
le
ss
is
a
n
op
en
ly
li
ce
n
se
d
ed
u
ca
ti
on
a
lr
es
ou
rc
e

85
6

W
al
m
at
‘s

C
FO

,
C
ha

rle
s
H
ol
le
y,
is

re
sp

si
b
le

fo
r

W
al
m
ar
t
ha

vi
ng

an
ac

ce
p
ta
b
le

le
ve

lo
f

w
or
ki
ng

ca
p
ita

Fi
g
ur
e
17

W
al
m
ar
t
C
FO

Im
p
or
ta
nc

e
of

W
or
ki
ng

C
ap

ita
l

W
or
ki
ng

ca
p
ita

l(
W
C
)i
s
a
m
ea

su
re
m
en

t
of

a
co

m
p
an

y’
s

op
er
at
in
g
liq

ui
d
ity

K
E
Y
P
O
IN
TS

•
W
C
is
im
p
or
ta
n
t
fo
r
la
rg
e
co
m
p
an
ie
s’
ab
il
it
y
to
bo
rr
ow
,

in
cr
ea
se
th
ei
r
sh
ar
e
p
ri
ce
,p
ay
ex
p
en
se
s
an

d
sh

or
t-
te
rm

d
eb
ts
.

•
W
C
is
im
p
or
ta
n
t
fo
r
sm
al
lc
om
p
an
ie
s
th
at
ca
n
n
ot
ac
ce
ss

fi
n
an
ci
al
m
ar
ke
ts
to
bo
rr
ow
,a
n
d
fo
r
st
ar
t-
u
p
s
th
at
n
ee
d
to

su
rv
iv
e
u
n
ti
lt
h
ey
br
ea
k
ev
en
.

•
W
C
ca
n
n
ot
gu
ar
an
te
e
w
h
et
h
er
a
co
m
p
an
y
is
fi
n
an
ci
al
ly

so
u
n
d
,b
u
t
it
gi
ve
s
so
m
e
in
si
gh
t.

W
or
ki
n
g
ca
p
it
al
(W
C
)
is
an
im
p
or
ta
n
t
m
et
ri
c
fo
r
al
lb
u
si
n
es
se
s,

re
ga
rd
le
ss
of
th
ei
r
si
ze
.W
C
is
a
si
gn
al
of
a
co
m
p
an
y’
s
op
er
at
in
g

li
qu
id
it
y
(F
ig
u
re
17
.3
).
H
av
in
g
en
ou
gh
W
C
m
ea
n
s
th
at
th
e
co
m
p
an
y

sh
ou
ld
be
ab
le
to
p
ay
fo
r
al
lo
fi
ts
sh
or
t-
te
rm
ex
p
en
se
s
an
d

li
ab
il
it
ie
s.

L
ar
ge
co
m
p
an
ie
s
p
ay
at
te
n
ti
on
to
W
C
fo
r
th
e
sa
m
e
re
as
on
as
sm
al
l

on
es
d
o:
W
C
is
a
m
ea
su
re
of
li
qu
id
it
y,
an
d
th
u
s
is
a
m
ea
su
re
of
th
ei
r

fu
tu
re
cr
ed
it
-w
or
th

in
es

s.
C
om
p
an
ie
s
w
h
o
w
an
t
to
bo
rr
ow
by
is
su
in
g

bo
n
d
s
or
p
u
rc
h
as
in
g
co
m
m
er
ci
al
p
ap
er
(a
m
ar
ke
t
of
la
rg
e,
sh
or
t-

te
rm
lo
an
s
fo
r
bi
g
co
m
p
an
ie
s)
w
il
lf
in
d
it
m
or
e
ex
p
en
si
ve
if
th
ey
d
o

n
ot
h
av
e
en
ou
gh
W
C
.I
ft
h
ey
ar
e
a
p
u
bl
ic
co
m
p
an
y,
th
ei
r
st
oc
k
p
ri
ce

m
ay
fa
ll
if
th
e
m
ar
ke
t
d
oe
sn
‘t
be
li
ev
e
th
ey
h
av
e
ad
eq
u
at
e
W
C
.

F
or
sm
al
lb
u
si
n
es
se
s
an
d
st
ar
t-
u
p
s,
u
n
ab
le
to
ac
ce
ss
fi
n
an
ci
al

m
ar
ke
ts
fo
r
bo
rr
ow
in
g,
W
C
h
as
m
or
e
d
ir
e
im
p
li
ca
ti
on
s.
W
C
ca
n
al
so

be
d
es
cr
ib
ed
as
th
e
am
ou
n
t
of
m
on
ey
th
at
a
sm
al
lb
u
si
n
es
s
or
st
ar
t-

u
p
n
ee
d
s
to
st
ay
in
op
er
at
io
n
.S
ta
rt
-u
p
s
n
ee
d
to
p
ay
at
te
n
ti
on
to

th
ei
r
W
C
be
ca
u
se

it
is

th
e
am
ou
n
t
of
m
on
ey
th
ey
n
ee
d
to
ke
ep
th
e

bu
si
n
es
s
ru
n
n
in
g
u
n
ti
lt
h
ey
br
ea
k-
ev
en
(s
ta
rt
ea
rn
in
g
a
n
et
p
ro
fi
t)
.

85
7

Li
q
ui
d
ity

is
a

m
ea

su
re
m
en

t
of

a
co

m
p
an

y’
s
ab

ili
ty

to
q
ui
ck

ly
tu
rn

as
se

ts
in
to

ca
sh

Fi
g
ur
e
17

.3
C
as
h

O
n
on
e
h
an
d
,W
C
is
im
p
or
ta
n
t
to
be
ca
u
se
it
is
a
m
ea
su
re
of
a

co
m
p
an
y’
s
ab
il
it
y
to
p
ay
of
fs
h
or
t-
te
rm
ex
p
en
se
s
or
d
eb
ts
.O
n
th
e

ot
h
er
h
an
d
,t
oo
m
u
ch
w
or
ki
n
g
ca
p
it
al
m
ea
n
s
th
at
so
m
e
as
se
ts
ar
e

n
ot
be
in
g
in
ve
st
ed
fo
r
th
e
lo
n
g-
te
rm
,s
o
th
ey
ar
e
n
ot
be
in
g
p
u
t
to

go
od
u
se
in
h
el
p
in
g
th
e
co
m
p
an
y
gr
ow
as
m
u
ch
as
p
os
si
bl
e.

W
C
is
on
ly
on
e
m
ea
su
re
of
a
co
m
p
an
y’
s
op
er
at
in
g
li
qu
id
it
y.
It
is
n
ot

th
e
on
ly
m
ea
su
re
,a
n
d
it
is
ce
rt
ai
n
ly
n
ot
a
gu
ar
an
te
e
of
a
co
m
p
an
y’
s

ab
il
it
y
to
p
ay
.A
co
m
p
an
y
m
ay
h
av
e
p
os
it
iv
e
W
C
,b
u
t
n
ot
en
ou
gh

ca
sh
to
p
ay
an
ex
p
en
se
to
m
or
ro
w
.S
im
il
ar
ly
,a
co
m
p
an
y
m
ay
h
av
e

n
eg
at
iv
e
W
C
,b
u
t
m
ay
be
ab
le
to
ad
ju
st
so
m
e
of
th
ei
r
d
eb
t
in
to
lo
n
g-

te
rm
d
eb
t
in
or
d
er
to
re
d
u
ce
th
ei
r
cu
rr
en
t
li
ab
il
it
ie
s.

W
C
is
an
im
p
or
ta
n
t
m
et
ri
c,
bu
t
is
n
ot
th
e
w
h
ol
e
st
or
y
of
a

co
m
p
an
y’
s
fi
n
an
ci
al
h
ea
lt
h
.

So
u
rc
e:
ht
tp
s:
//
w
w
w
.b
ou
n
d
le
ss
.c
om
/f
in
a
n
ce
/i
n
tr
od
u
ct
io
n
-t
o-

w
or
ki
n
g
-c
a
p
it
a
l/
w
or
ki
n
g
-c
a
p
it
a
l/
im
p
or
ta
n
ce
-o
f-
w
or
ki
n
g
-c
a
p
it
a
l/

C
C
-B
Y
-S
A

B
ou
n
d
le
ss
is
a
n
op
en
ly
li
ce
n
se
d
ed
u
ca
ti
on
a
lr
es
ou
rc
e

85
8

U
nd

er
st
an

d
in
g
th
e
B
us

in
es

s
N
ee

d
s

Lo
ng

-T
er
m

p
p
ro
ac

S
ho

rt
-T
er
m

A
p
p
ro
ac

C
ho

os
in
g
a
P
ol
ic
y

Se
ct
io
n
2

A
p
p
ro
ac

he
s
to

W
or
ki
ng

C
ap

ita
lF

in
an

ci
ng

85
9

ht
tp
s:
//
w
w
w
.b
ou

nd
le
ss
.c
om

/
na

nc
e/
in
tr
od

uc
tio

n-
to
-w

or
ki
ng

-c
ap

ita
l/a

p
p
ro
ac

he
s-
to
-w

or
ki
ng

-c
ap

ita
l-
n

an
ci
ng

U
nd

er
st
an

d
in
g
th
e
B
us

in
es

s
N
ee

d
s

W
or
ki
ng

ca
p
ita

ln
ee

d
s
w
ill
va

ry
d
ep

en
d
in
g
on

th
e
ty
p
e

of
th
e
b
us

in
es

s
an

d
its

op
er
at
io
na

lr
eq

ui
re
m
en

ts
.

K
E
Y
P
O
IN
TS

•
Su
ff
ic
ie
n
t
w
or
ki
n
g
ca
p
it
al
is
re
qu
ir
ed
to
en
su
re
th
at
a
fi
rm
is

ab
le
to
co
n
ti
n
u
e
it
s
op
er
at
io
n
s
an
d
th
at
it
h
as
su
ff
ic
ie
n
t
fu
n
d
s

to
sa
ti
sf
y
bo
th
m
at
u
ri
n
g
sh
or
t-
te
rm
an
d
lo
n
g-
te
rm
d
eb
t
an
d

u
p
co
m
in
g

op
er
at
io
n
al
ex
p
en
se
s.

•
T
h
e
m
an
ag
em
en
t
of
w
or
ki
n
g
ca
p
it
al
in
vo
lv
es
m
an
ag
in
g

in
ve
n
to
ri
es
,a
cc
ou
n
ts
re
ce
iv
ab
le

an
d
p
ay
ab
le
,a
n
d
ca
sh
.

•
W
h
en
ca
lc
u
la
ti
n
g
w
or
ki
n
g
ca
p
it
al
w
e
th
in
k
in
te
rm
s
of
n
et

w
or
ki
n
g
ca
p
it
al
,w
h
ic
h
is
ca
lc
u
la
te
d
as
cu
rr
en
t
as
se
ts
m
in
u
s

cu
rr
en
t
li
ab
il
it
ie
s.

•

In
an
y
co
m
p
an
y,
la
rg
e
or
sm
al
l,
th
er
e
is
an
in
h
er
en
t
tr
ad
eo
ff

be
tw
ee
n
li
qu
id
it
y
an
d
p
ro
fi
ta
bi
li
ty
.

U
n
d
e
rs
ta
n
d
in
g
th
e
B
u
si
n
e
ss
N
e
e
d
s

W
or
ki
n
g
ca
p
it
al
is
a
fi
n
an
ci
al
m
et
ri
c
w
h
ic
h
re
p
re
se
n
ts
th
e
op
er
at
in
g

li
qu
id
it
y
av
ai
la
bl
e
to
a
bu
si
n
es
s.
W
or
ki
n
g
ca
p
it
al
is
co
n
si
d
er
ed
a

p
ar
t
of
op
er
at
in
g
ca
p
it
al
al
on
g
w
it
h
fi
xe
d
as
se
ts
,s
u
ch
as
p
la
n
t
an
d

eq
u
ip
m
en
t.
Su
ff
ic
ie
n
t
w
or
ki
n
g
ca
p
it
al
is
re
qu
ir
ed
to
en
su
re
th
at
a

fi
rm
is
ab
le
to
co
n
ti
n
u
e
it
s
op
er
at
io
n
s
an
d
th
at
it
h
as

su
ff
ic
ie
n
t

fu
n
d
s
to
sa
ti
sf
y
bo
th
m
at
u
ri
n
g
sh
or
t-
te
rm
an
d
lo
n
g-
te
rm
d
eb
t
an
d

ta
ke
ca
re
of
u
p
co
m
in
g
op
er
at
io
n
al
ex
p
en
se
s.
H
ow
ev
er
,t
oo
m
u
ch

w
or
ki
n
g
ca
p
it
al
ca
n
ca
rr
y
w
it
h
it
a
h
ig
h
er
co

st
of

ca
p
it
al
.A
co
m
p
an
y

ca
n
be
en
d
ow
ed
w
it
h
as
se

ts
an

d
p
ro
fi
ta
bi
li
ty
bu
t
sh
or
t
of
li
qu
id
it
y
if

it
s
as
se
ts
ca
n
n
ot
re
ad
il
y
be
co
n
ve
rt
ed
in
to
ca
sh
.T
h
e
m
an
ag
em
en
t
of

w
or
ki
n
g
ca
p
it
al
in
vo
lv
es
m
an
ag
in
g
in
ve
n
to
ri
es
,a
cc
ou
n
ts
re
ce
iv
ab
le

an
d
p
ay
ab
le
,a
n
d
ca
sh
.

C
a
lc
u
la
ti
o
n

o
f
W
o
rk
in
g
C
a
p
it
a
l

W
h
en
ca
lc
u
la
ti
n
g
w
or
ki
n
g
ca
p
it
al
,w
e
th
in
k
in
te
rm
s
of
n
et
w
or
ki
n
g

ca
p
it
al
,w
h
ic
h
is
ca
lc
u
la
te
d
as
cu
rr
en
t
as
se
ts
m
in
u
s
cu
rr
en
t

li
ab
il
it
ie
s.
T
h
is
is
th
e
fi
gu
re
co
m
m
on
ly
u
se
d
in
va
lu
at
io
n
te
ch
n
iq
u
es

su
ch
as

d
is
co

u
n
te
d
ca
sh
fl
ow
s.
If
cu
rr
en
t
as
se
ts
ar
e
le
ss
th
a

n
cu

rr
en
t

li
ab
il
it
ie
s,
an

en
ti
ty
h
as
a

w
or
ki
n
g
ca
p
it
al
d
ef
ic
ie
n
cy
,a
ls
o
ca
ll
ed
a

w
or
ki
n
g
ca
p
it
al
d
ef
ic
it
.C
u
rr
en
t
as
se
ts
an
d
cu
rr
en
t
li
ab
il
it
ie
s
in
cl
u
d
e

th
re
e
ac
co
u
n
ts
w
h
ic
h
ar
e
of
sp
ec
ia
li
m
p
or
ta
n
ce
.T
h
es
e
ac
co
u
n
ts

re
p
re
se
n
t
th
e
ar
ea
s
of
th
e
bu
si
n
es
s
w
h
er
e
m
an
ag
er
s
h
av
e
th
e
m
os
t

d
ir
ec
t
im
p
ac
t:

1.
A
cc
ou
n
ts
re
ce
iv
ab
le
(c
u
rr
en
t
as
se
t)

2.
In
ve
n
to
ry
(c
u
rr
en
t
as
se
t)

3.
A
cc
ou
n
ts
p
ay
ab
le
(c
u
rr
en
t
li
ab
il
it
y)

86
0

A
co
m
p
an
y
id
ea
ll
y
w
an
ts
ac
co
u
n
ts
re
ce
iv
ab
le
to
be
co
ll
ec
te
d
as

qu
ic
kl
y
as
p
os
si
bl
e
in
or
d
er
to
h
av
e
as
m
u
ch
u
se
of
th
e
fu
n
d
s
as

p
os
si
bl
e.
C
on
ve
rs
el
y,
a
fi
rm
st
ri
ve
s
to
p
u
t
of
ft
h
e
se
tt
le
m
en
t
of

ac
co
u
n
ts
p
ay
ab
le
as
lo
n
g
as
p
os
si
bl
e
fo
r
th
e
sa
m
e
re
as
on
.T
h
e

cu
rr
en
t
p
or
ti
on
of
d
eb
t
is
al
so
cr
it
ic
al
,b
ec
au
se
it
re
p
re
se
n
ts
a
sh
or
t-

te
rm
cl
ai
m
to
cu
rr
en
t
as
se
ts
an
d
is
of
te
n
se
cu
re
d
by
lo
n
g
te
rm

as
se
ts
.C
om
m
on
ty
p
es
of
sh
or
t-
te
rm
d
eb
t
ar
e
ba
n
k
lo
an
s
an
d
li
n
es

of
cr
ed
it
.I
n
ve
n
to
ry
is
a
sp
ec
ia
lc
as
e
in
w
h
ic
h
ev
en
n
on
-f
in
an
ci
al

m
an
ag
er
s
h
av
e
a
st
ag
e.
T
oo
m
u
ch
in
ve
n
to
ry
on
h
an
d
w
il
lr
ed
u
ce
th
e

ri
sk
of
a
co
m
p
an
y
fa
il
in
g
to
sa
ti
sf
y
cu
st
om
er
n
ee
d
s,
bu
t
it
ca
n
al
so

re
d
u
ce
p
ro
fi
ta
bi
li
ty
.A
n
ex
a

m
p
le

of
re
d
u
ce
d
p
ro
fi
ta
bi
li
ty
w
ou
ld
be
in

th
e
co
m
p
u
te
r
in
d
u
st
ry
,w
h
er
e
in
ve
n
to
ri
es
re
gu
la
rl
y
lo
se
va

lu
e

be
ca
u
se
of
th
e
fa
st
-m
ov
in
g
n
at
u
re
of
th
e
in
d
u
st
ry
( F
ig
u
re
17
.4
).

P
ro
fi
ta
b
il
it
y
a
n
d
L
iq
u
id
it
y
T
ra
d
e
o
ff

In
an
y
co
m
p
an
y,
la
rg
e
or
sm
al
l,
th
er
e
is
an
in
h
er
en
t
tr
ad
eo
ff

be
tw
ee
n
li
qu
id
it
y
an
d
p
ro
fi
ta
bi
li
ty
.L
ar
ge
co
m
p
an
ie
s
p
os
se
ss

re
so
u
rc
es
to
h
el
p
th
em
m
an
ag
e
th
is
tr
ad
eo
ff
,s
u
ch
as
an
ac
co
u
n
ti
n
g

d
ep
ar
tm
en
t,
n
eg
ot
ia
ti
n
g
p
ow
er
w
it
h
th
ei
r
su
p
p
li
er
s,
or
ac
ce
ss
to
th
e

ca
p
it
al
m
ar
ke
ts
.F
or
th
e
en
tr
ep
re
n
eu
r,
h
ow
ev
er
,w
h
o
is
of
te
n

re
so
u
rc
e-
st
ar
ve
d
an
d
d
oe
sn
’t
h
av
e
en
ou
gh
op
er
at
in
g
h
is
to
ry
to

se
cu
re
ad
d
it
io
n
al
cr
ed
it
,m
an
ag
in
g
th
is
tr
ad
eo
ff
ca
n
fe
el
li
ke
w
al
ki
n
g

a
ti
gh
tr
op
e.
C
on
si
d
er
th
e
ca
se
of
a
n
ew
cu
st
om
er
fo
r
a
sm
al
l

co
m
p
an
y.
T
h
is
n
ew
cu
st
om
er
h
as
th
e
p
ot
en
ti
al
to
of
fe
r
h
u
ge
gr
ow
th

in
th
e
co
m
p
an
y’
s
sa
le
s,
bu
t
th
is
gr
ow
th
in
sa
le
s
w
il
lb
e
ac
co
m
p
an
ie
d

by
a
su
bs
eq
u
en
t
gr
ow
th
in
va
ri
ab
le
co
st
s.
T
h
e
co
m
p
an
y
m
ay
n
ot

h
av
e
th
e
re
so
u
rc
es
,i
.e
.,
w
or
ki
n
g
ca
p
it
al
,t
o
m
ee
t
th
es
e
va
ri
ab
le
co
st
s

th
at
co
m
e
w
it
h
in
cr
ea
se
d
sa
le
s.

86
1

Th
is
is
an

ex
am

p
le

of
m
od

er
n
in
ve

nt
or
y
so

ft
w
ar
e
th
at

en
ab

le
s
m
an

ag
er
s
to

p
re
ci
se

ly
tr
ac

k
or
d
er
s
an

d
in
ve

nt
or
y
le
ve

ls
.

Fi
g
ur
e
17

In
ve
nt
or
y

S
of
tw
ar
e

So
u
rc
e:
ht
tp
s:
//
w
w
w
.b
ou
n
d
le
ss
.c
om
/f
in
a
n
ce
/i
n
tr
od
u
ct
io
n
-t
o-

w
or
ki
n
g
-c
a
p
it
a
l/
a
p
p
ro
a
ch
es
-t
o-
w
or
ki
n
g
-c
a
p
it
a
l-
fi
n
a
n
ci
n
g
/

u
n
d
er
st
a
n
d
in
g
-t
he
-b
u
si
n
es
s-
n
ee
d
s/

C
C
-B
Y
-S
A

B
ou
n
d
le
ss
is
a
n
op
en
ly
li
ce
n
se
d
ed
u
ca
ti
on
a
lr
es
ou
rc
e

Lo
ng

-T
er
m

A
p
p
ro
ac

h
Th

e
id
ea

th
at

w
or
ki
ng

ca
p
ita

le
nc

om
p
as

se
s
th
e

re
la
tio

ns
hi
p
b
et
w
ee

n
sh

or
t-
te
rm

as
se

ts
an

d
sh

or
t-
te
rm

lia
b
ili
tie

s
m
ay

no
t
b
e
en

tir
el
y
tr
ue

K
E
Y
P
O
IN
TS

•
T
h
e
cl
as
si
fi
ca
ti
on
of
as
se
ts
as
‘c
u
rr
en
t’
or
‘n
on
-c
u
rr
en
t’
m
ay

n
ot
be
ap
p
ro
p
ri
at
e
fo
r
d
es
cr
ib
in
g
th
e
op
er
at
io
n
s
of
a
fi
rm

be
ca
u
se
d
if
fe
re
n
t
op
er
at
io
n
s
ar
e
cl
as
si
fi
ed
to
ge
th
er
.

•
D
if
fi
cu
lt
ie
s
in
w
or
ki
n
g
ca
p
it
a

l
m
an

ag
em
en
t
ca
n
ar
is
e
fr
om
th
e

co
m
p
le
xi
ty
of
m
an
y
bu
si
n
es
s
en
te
rp
ri
se
s
an
d
th
e
re
su
lt
an
t

in
ab
il
it
y
to
d
et
er
m
in
e
th
e
le
n
gt
h
of
th
e
op
er
at
in
g

cy
cl
e.

•
W
or
ki
n
g
ca
p
it
al
is
a
st
at
ic
co
n
ce
p
t,
an
d
d
eb
t-
p
ay
in
g
ab
il
it
y
is

d
yn
am
ic
.T
h
er
ef
or
e,
w
or
ki
n
g
ca
p
it
al
is
n
ot
n
ec
es
sa
ri
ly
a
go
od

in
d
ic
at
io
n
of
th
e
ab
il
it
y
of
th
e
fi
rm
to
p
ay
cu
rr
en
t
li
ab
il
it
ie
s.

L
o
n
g
-T
e
rm
A
p
p
ro
a
ch
to
W
o
rk
in
g
C
a
p
it
a
l

R
ec
al
lt
h
at
w
or
ki
n
g
ca
p
it
al
m
an
ag
em
en
t
is
ge
n
er
al
ly
th
ou
gh
t
of
as

th
e
m
an
ag
em
en
t
of
th
e
re
la
ti
on
sh
ip
be
tw
ee
n
sh
or
t-
te
rm
as
se
ts
an
d

sh
or
t-
te
rm
li
ab
il
it
ie
s.
H
ow
ev
er
,t
h
e
sh
or
t-
te
rm
n
at
u
re
of
w
or
ki
n
g

ca
p
it
al
,a
s
w
el
la
s
th
e
cl
as
si
fi
ca
ti
on
of
as
se
ts
an
d
li
ab
il
it
ie
s
in
to

cu
rr
en
t
an
d
n
on
-c
u
rr
en
t,
h
as
re
ce
n
tl
y
co
m
e
u
n
d
er
sc
ru
ti
n
y.
T
h
e

‘c
u
rr
en
t’
an
d
‘n
on
-c
u
rr
en
t’
cl
as
si
fi
ca
ti
on
ca
n
be
se
en
as
d
ef
ec
ti
ve
fo
r

86
2

d
es
cr
ib
in
g
th
e
op
er
at
io
n
s
of
a
fi
rm
be
ca
u
se
d
if
fe
re
n
t
op
er
at
io
n
s
ar
e

cl
as
si
fi
ed
to
ge
th
er
.F
or
ex
am
p
le
,a
ss
et
s
su
ch
as
in
te
re
st
re
ce
iv
ab
le

d
o
n
ot
ar
is
e
fr
om
th
e
sa
m
e
ty
p
e
of
op
er
at
io
n
s
as
ac
co
u
n
ts
re
ce
iv
ab
le

an
d
in
ve
n
to
ri
es
,b
u
t
th
ey
ar
e
al
lg
ro
u
p
ed
to
ge
th
er
as
cu
rr
en
t
as
se
ts
.

T
h
e
‘c
u
rr
en
t’
an
d
‘n
on
-c
u
rr
en
t’
cl
as
si
fi
ca
ti
on
ca
n
al
so
be
cr
it
ic
iz
ed

fo
r
it
s
as
su
m
p
ti
on
th
at
w
or
ki
n
g
ca
p
it
al
it
em
s
ar
e
cl
os
el
y
re
la
te
d
to

cu
rr
en
t
op
er
at
io
n
s,
an
d
th
at
lo
n
g-
te
rm
as
se
ts
an
d
li
ab
il
it
ie
s
ar
e

re
la
te
d
to
th
e
lo
n
g-
te
rm
p
la
n
n
in
g
fu
n
ct
io
n
s
of
th
e
or
ga
n
iz
at
io
n
.I
n

m
os
t
fi
rm
s,
th
er
e
is
li
tt
le
re
la
ti
on
sh
ip
be
tw
ee
n
w
or
ki
n
g
ca
p
it
al
an
d

cu
rr
en
t
op
er
at
io
n
s.
C
as
h
fl
ow
s
be
co
m
in
g
av
ai
la
bl
e
fo
r
th
e
p
ay
m
en
t

of
li
ab
il
it
ie
s
m
ay
be
as
cl
os
el
y
re
la
te
d
to
th
e
u
se
of
lo
n
g-
te
rm

re
so
u
rc
es
as
to
th
e
sa
le
of
in
ve
n
to
ri
es
.T
h
is
is
p
ar
ti
cu
la
rl
y
tr
u
e
in
th
e

se
rv
ic
e
in
d
u
st
ry
,w
h
er
e
in
ve
n
to
ri
es
m
ay
be
re
la
ti
ve
ly
sm
al
lo
r

n
on
ex
is
te
n
t.
T
h
er
ef
or
e,
cu
rr
en
t
ob
li
ga
ti
on
s
w
il
lb
e
p
ai
d
fr
om
th
e

re
ve
n
u
es
d
er
iv
ed
fr
om
th
e
u
se
or
le
as
in
g
of
lo
n
g-
te
rm
as
se
ts
.

P
ro
b
le
m
s
W
it
h
th
e
O
p
e
ra
ti
n
g
C
yc
le

(F
ig
u
re
17
.5
)
T
h
e
d
if
fi
cu
lt
y
of
as
so
ci
at
in
g
w
or
ki
n
g
ca
p
it
al
w
it
h
th
e

op
er
at
in
g
cy
cl
e
is
co
m
p
ou
n
d
ed
by
th
e
w
ay
th
e
co
n
ce
p
t
of
th
e

op
er
at
in
g
cy
cl
e
is
ap
p
li
ed
in
p
ra
ct
ic
e.
G
en
er
al
ly
,a
rb
it
ra
ry
ru
le
s,

su
ch
as
th
e
on
e-
ye
ar
ru
le
,d
ic
ta
te
h
ow
lo
n
g
a
co
m
p
an
y’
s
op
er
at
in
g

cy
cl
e
w
il
lb
e.
T
h
is
in
co
n
si
st
en
cy
d
oe
s
n
ot
fo
ll
ow
th
e
m
at
ch
in
g

p
ri
n
ci
p
le
,w
h
ic
h
st
at
es
th
at
sh
or
t-
te
rm
ca
sh
n
ee
d
s
sh
ou
ld
be

fi
n
an
ce
d
w
it
h
sh
or
t-
te
rm
d
eb
t
an
d
lo
n
g-
te
rm
ca
sh
n
ee
d
s
sh
ou
ld
be

fi
n
an
ce
d
w
it
h
lo
n
g-
te
rm
so
u
rc
es
of
fu
n
d
s.
M
or
e
d
if
fi
cu
lt
ie
s
ar
is
e

be
ca
u
se
of
th
e
co
m
p
le
xi
ty
of
m
an
y
bu
si
n
es
s
en
te
rp
ri
se
s
an
d
th
e

re
su
lt
an
t
in
ab
il
it
y
to
d
et
er
m
in
e
th
e
le
n
gt
h
of
th
e
op
er
at
in
g
cy
cl
e.

A
lt
h
ou
gh
th
e
fr
eq
u
en
cy
of
th
e
ci
rc
u
la
ti
on
of
as
se
ts
m
ay
be
re
le
va
n
t

to
th
e
p
re
d
ic
ti
on
of
ca
sh
fl
ow
s,
it
is
d
if
fi
cu
lt
to
co
n
n
ec
t
th
is

in
fo
rm
at
io
n
to
th
e
in
co
m
e
an
d
ca
sh
fl
ow
w
h
en
al
lc
u
rr
en
t
as
se
ts
ar
e

cl
as
si
fi
ed
as
if
th
ey
h
ad
th
e
sa
m
e
fr
eq
u
en
cy
of
ci
rc
u
la
ti
on
.

T
h
e
S
ta
ti
c
N
a
tu
re
o
f
W
o
rk
in
g
C
a
p
it
a
l

T
h
e
p
re
se
n
ta
ti
on
of
w
or
ki
n
g
ca
p
it
al
m
ay
p
ro
vi
d
e
so
m
e
va
li
d

in
fo
rm
at
io
n
to
th
e
gr
an
to
rs
of
sh
or
t-
te
rm
cr
ed
it
be
ca
u
se
it
in
d
ic
at
es

86
3

A
b
ov

e
is
a
o

w
ch

ar
t
fo
r
a
sa

m
p
le

op
er
at
in
g
cy

cl
e
fo
r

a
r
m
.

Fi
g
ur
e
17

.5
Th
e

O
p
er
at
in
g
C
yc
le

th
e
d
eg
re
e
of
p
ro
te
ct
io
n
,o
r
th
e
am
ou
n
t
of
bu
ff
er
,c
ar
ri
ed
by
lo
n
g-

te
rm
cr
ed
it
or
s
an
d
st
oc
kh
ol
d
er
s.
H
ow
ev
er
,t
h
e
am
ou
n
t
of
w
or
ki
n
g

ca
p
it
al
is
n
ot
n
ec
es
sa
ri
ly
a
go
od
in
d
ic
at
or
of
th
e
ab
il
it
y
of
th
e
fi
rm
to

p
ay
cu
rr
en
t
li
ab
il
it
ie
s
as
th
ey
co
m
e
d
u
e.
W
or
ki
n
g
ca
p
it
al
is
a
st
a
ti
c

co
n
ce
p
t,
an
d
d
eb
t-
p
ay
in
g
ab
il
it
y
is
d
yn
am
ic
.C
as
h
be
co
m
es

av
ai
la
bl
e
fo
r
th
e
p
ay
in
g
of
sh
or
t-
te
rm
li
ab
il
it
ie
s
p
ri
m
ar
il
y
fr
om

op
er
at
io
n
s,
n
ot
fr
om
th
e
li
qu
id
at
io
n
of
p
ar
ti
cu
la
r
as
se
ts
su
ch
as

ac
co
u
n
ts
re
ce
iv
ab
le
.I
n
sh
or
t,
th
e
ab
il
it
y
of
a
fi
rm
to
m
ee
t
it
s
d
eb
ts

as
th
ey
m
at
u
re
d
ep
en
d
s
p
ri
m
ar
il
y
on
th
e
ou
tc
om
e
of
p
ro
je
ct
ed

op
er
at
io
n
s.
F
u
rt
h
er
m
or
e,
n
on
-l
iq
u
id
cu
rr
en
t
as
se
ts
be
co
m
e
li
qu
id

se
qu
en
ti
al
ly
–
th
at
is
,f
ro
m
ra
w
m
at
er
ia
li
n
ve
n
to
ri
es
to
w
or
k
in

p
ro
ce
ss
to
fi
n
is
h
ed
in
ve
n
to
ri
es
to
ac
co
u
n
ts
re
ce
iv
ab
le
to
ca
sh
–
bu
t

cu
rr
en
t
li
ab
il
it
ie
s
be
co
m
e
d
u
e
si
m
u
lt
an
eo
u
sl
y
or
at
d
at
es
th
at
ar
e

u
n
re
la
te
d
to
ea
ch
ot
h
er
.T
h
er
ef
or
e,
if
re
ve
n
u
es
ar
e
co
n
tr
ac
ti
n
g,
th
e

li
qu
id
at
io
n
of
as
se
ts
th
ro
u
gh
n
or
m
al
op
er
at
io
n
s
w
il
lb
e
d
el
ay
ed
,b
u
t

th
e
d
u
e
d
at
es
fo
r
li
ab
il
it
ie
s
w
il
ln
ot
ch
an
ge
.I
t
is
al
so
ar
gu
ed
th
at
th
e

cl
as
si
fi
ca
ti
on
of
as
se
ts
an
d
li
ab
il
it
ie
s
as
‘c
u
rr
en
t’
an
d
‘n
on
-c
u
rr
en
t’

as
a
m
et
h
od
of
p
re
se
n
ti
n
g
th
e
so
lv
en
cy
of
th
e
fi
rm
is
le
ss
im
p
or
ta
n
t

to
d
ay
th
an
in
th
e
p
as
t
fo
r
a
n
u
m
be
r
of
re
as
on
s.
O
th
er
st
at
em
en
ts
,

p
ar
ti
cu
la
rl
y
th
e
in
co
m
e
st
at
em
en
t
an
d
th
e
ca
sh
fl
ow
st
at
em
en
t,
m
ay

p
ro
vi
d
e
be
tt
er
in
fo
rm
at
io
n
re
ga
rd
in
g
ex
p
ec
ta
ti
on
s
of
so
lv
en
cy
.

A
d
d
it
io
n
al
ly
,b
u
si
n
es
s
en
te
rp
ri
se
s
ar
e
be
co
m
in
g
m
or
e
h
ig
h
ly

co
m
p
le
x,
so
th
at
n
o
p
re
d
et
er
m
in
ed
w
or
ki
n
g
ca
p
it
al
ra
ti
o
ca
n
be

d
ee
m
ed
to
be
n
ec
es
sa
ry
fo
r
ad
eq
u
at
e
so
lv
en
cy
.M
or
eo
ve
r,
th
e

in
cr
ea
se
d
en
tr
y
of
m
an
y
fi
rm
s
in
to
th
e
se
rv
ic
e
in
d
u
st
ri
es
h
as
m
ad
e

th
e
so
lv
en
cy
of
fi
rm
s
le
ss
d
ep
en
d
en
t
u
p
on
re
so
u
rc
es
cl
as
si
fi
ed
as

cu
rr
en
t.

So
u
rc
e:
ht
tp
s:
//
w
w
w
.b
ou
n
d
le
ss
.c
om
/f
in
a
n
ce
/i
n
tr
od
u
ct
io
n
-t
o-

w
or
ki
n
g
-c
a
p
it
a
l/
a
p
p
ro
a
ch
es
-t
o-
w
or
ki
n
g
-c
a
p
it
a
l-
fi
n
a
n
ci
n
g
/l
on
g
-t
er
m
–

a
p
p
ro
a
ch
/

C
C
-B
Y
-S
A

B
ou
n
d
le
ss
is
a
n
op
en
ly
li
ce
n
se
d
ed
u
ca
ti
on
a
lr
es
ou
rc
e

86
4

S
ho

rt
-T
er
m

A
p
p
ro
ac

D
ec

is
io
ns

re
la
tin

g
to

w
or
ki
ng

ca
p
ita

la
re

us
ua

lly
sh

or
t-

te
rm

,s
in
ce

it
is

th
e
d
i
er
en

ce
b
et
w
ee

n
cu

rr
en

t
as

se
ts

an
d
cu

rr
en

t
lia
b
ili
tie

K
E
Y
P
O
IN
TS

•
T
h
e
m
ai
n
co
n
si
d
er
at
io
n
s
fo
r
w
or
ki
n
g
ca
p
it
al
ar
e
ca
sh
fl
ow
/

li
qu
id
it
y
an
d
p
ro
fi
ta
bi
li
ty
/
re
tu
rn
s
on
ca
p
it
al
.

•
T
h
e
m
os
t
w
id
el
y
u
se
d
m
ea
su
re
of
ca
sh
fl
ow
is
th
e
n
et

op
er
at
in
g
cy
cl
e
or
ca
sh

co
n
ve
rs
io
n
cy
cl
e.

•
T
h
e
ca
sh
co
n
ve
rs
io
n
cy
cl
e
m
ea
su
re
s
h
ow
lo
n
g
a
fi
rm
w
il
lb
e

d
ep
ri
ve
d
of
ca
sh
if
it
in
cr
ea
se
s
it
s
in
ve
st
m
en
t
in
re
so
u
rc
es
in

or
d
er
to
ex
p
an
d

cu
st
om
er
sa
le
s.

•
T
h
e
ai
m
of
th
e
st
u
d
y
an
d
ca
lc
u
la
ti
on
of
th
e
ca
sh
co
n
ve
rs
io
n

cy
cl
e
is
to
ch
an
ge
th
e
p
ol
ic
ie
s
re
la
ti
n
g
to
cr
ed
it
p
u
rc
h
as
e
an
d

cr
ed
it
sa
le
s.

S
h
o
rt
-T
e
rm
A
p
p
ro
a
ch
to
W
o
rk
in
g
C
a
p
it
a
l
M
a
n
a
g
e
m
e
n
t

W
or
ki
n
g
ca
p
it
al
is
th
e
am
ou
n
t
of
ca
p
it
al
th
at
is
re
ad
il
y
av
ai
la
bl
e
to

an
or
ga
n
iz
at
io
n
.W
or
ki
n
g
ca
p
it
al
is
th
e
d
if
fe
re
n
ce
be
tw
ee
n
ca
sh

re
so
u
rc
es
or
as
se
ts
re
ad
il
y
co
n
ve
rt
ib
le
in
to
ca
sh
(c
u
rr
en
t
as
se
ts
)
an
d

ca
sh
ob
li
ga
ti
on
s
(c
u
rr
en
t
li
ab
il
it
ie
s)
.A
s
a
re
su
lt
,t
h
e
d
ec

is
io
n

re
la
ti
n
g
to
w
or
ki
n
g
ca
p
it
al
ar
e
al
m
os
t
al
w
ay
s
cu
rr
en
t,
i.e
.,
sh
or
t

te
rm
,

d
ec
is
io
n
s.

In
ot
h
er
w
or
d
s,
w
or
ki
n
g
ca
p
it
al
m
an
ag
em
en
t

d
if
fe
rs
fr
om
ca
p
it
al
in
ve
st
m

en
t
d
ec

is
io
n
s
–
sp
ec
if
ic
al
ly
in
te
rm
s
of

d
is
co
u
n
ti
n
g
an
d
p
ro
fi
ta
bi
li
ty
.W
or
ki
n
g
ca
p
it
al
m
an
ag
em
en
t
ap
p
li
es

d
if
fe
re
n
t
cr
it
er
ia
in
d
ec
is
io
n

m
ak
in
g.

T
h
e
m
ai
n
co
n
si
d
er
at
io
n
s
ar
e

ca
sh
fl
ow
/
li
qu
id
it
y
an
d
p
ro
fi
ta
bi
li
ty
/
re
tu
rn
s
on
ca
p
it
al
.T
h
e
m
os
t

w
id
el
y
u
se
d
m
ea
su
re
of
ca
sh
fl
ow
is
th
e
n
et
op
er
at
in
g
cy
cl
e
or
ca
sh

co
n
ve
rs
io
n
cy
cl
e.
T
h
is
m
ea
su
re
s
h
ow
lo
n
g
a
fi
rm
w
il
lb
e
d
ep
ri
ve
d
of

ca
sh
if
it
in
cr
ea
se
s
it
s
in
ve
st
m
en
t
in
re
so
u
rc
es
in
or
d
er
to
ex
p
an
d

cu
st
om
er
sa
le
s.

T
h
e
ca
sh
co
n
ve
rs
io
n
cy
cl
e
in
d
ic
at

es
th
e

fi
rm
‘s
ab
il
it
y
to
co
n
ve
rt
it
s

re
so
u
rc
es
in
to
ca
sh
an
d
in
fo
rm
s
m
an
ag
em
en
t
of
th
e
li
qu
id
it
y
ri
sk

en
ta
il
ed
by
gr
ow
th
( F
ig
u
re
17
.6
).
B
ec
au
se
th
is
n
u
m
be
r
ef
fe
ct
iv
el
y

co
rr
es
p
on
d
s
to
th
e
ti
m
e
th
at
th
e
fi
rm
‘s
ca
sh
is
ti
ed
u
p
in
op
er
at
io
n
s

an
d
u
n
av
ai
la
bl
e
fo
r
ot
h
er
ac
ti
vi
ti
es
,m
an
ag
em
en
t
ge
n
er
al
ly
ai
m
s
at

sh
or
te
n
in
g
th
e
ca
sh
co
n
ve
rs
io
n
cy
cl
e
as
m
u
ch
as
p
os
si
bl
e.
H
ow
ev
er
,

86
5

A
b
ov

e
is
a
ch

ar
t
sh

ow
in
g
a
sa

m
p
le

ca
sh

co
nv

er
si
on

cy
cl
e.

Fi
g
ur
e
17

.6
C
as
h
C
on
ve
rs
io
n
C
yc
le

sh
or
te
n
in
g
th
e
cy
cl
e
cr
ea
te
s
it
s
ow
n
ri
sk
s.
W
h
il
e
a
fi
rm
co
u
ld
ev
en

ac
h
ie
ve
a
n
eg
at
iv
e
ca
sh
co
n
ve
rs
io
n
by
co
ll
ec
ti
n
g
fr
om
cu
st
om
er
s

be
fo
re
p
ay
in
g
su
p
p
li
er
s,
a
p
ol
ic
y
of
st
ri
ct
co
ll
ec
ti
on
s
an
d
la
x

p
ay
m
en
ts
is
n
ot
ty
p
ic
al
ly
su
st
ai
n
ab
le
.T
h
e
ai
m
of
th
e
st
u
d
y
an
d

ca
lc
u
la
ti
on
of
th
e
ca
sh
co
n
ve
rs
io
n
cy
cl
e
is
to
ch
an
ge
th
e
p
ol
ic
ie
s

re
la
ti
n
g
to
cr
ed
it
p
u
rc
h
as
e
an
d
cr
ed
it
sa
le
s.
A
fi
rm
ca
n
ch
an
ge
it
s

st
an
d
ar
d
s
fo
r
p
ay
m
en
t
on
cr
ed
it
p
u
rc
h
as
es
an
d
ge
tt
in
g
p
ay
m
en
t

fr
om
d
eb
to
rs
on
th
e
ba
si
s
of
ca
sh
co
n
ve
rs
io
n
cy
cl
e.
If
th
e
fi
rm
is
in

an
ef
fe
ct
iv
e
ca
sh
li
qu
id
it
y
p
os
it
io
n
,i
t
ca
n
m
ai
n
ta
in
it
s
p
as
t
cr
ed
it

p
ol
ic
ie
s.

So
u
rc
e:
ht
tp
s:
//
w
w
w
.b
ou
n
d
le
ss
.c
om
/f
in
a
n
ce
/i
n
tr
od
u
ct
io
n
-t
o-

w
or
ki
n
g
-c
a
p
it
a
l/
a
p
p
ro
a
ch
es
-t
o-
w
or
ki
n
g
-c
a
p
it
a
l-
fi
n
a
n
ci
n
g
/s
ho
rt
–

te
rm
-a
p
p
ro
a
ch
/

C
C
-B
Y
-S
A

B
ou
n
d
le
ss
is
a
n
op
en
ly
li
ce
n
se
d
ed
u
ca
ti
on
a
lr
es
ou
rc
e

C
ho

os
in
g
a
P
ol
ic
y

A
r
m

w
ill
us

e
a
co

m
b
in
at
io
n
of

p
ol
ic
ie
s
fo
r
m
an

ag
in
g

w
or
ki
ng

ca
p
ita

l,
fo
cu

si
ng

on
ca

sh
o

w
,l
iq
ui
d
ity
,

ro
t
ab

ili
ty
,a

nd
ca

p
ita

lr
et
ur
n.

K
E
Y
P
O
IN
TS

•
W
or
ki
n
g
ca
p
it
al
p
ol
ic
ie
s
ai
m
at
m
an
ag
in
g
cu
rr
en
t
as
se
ts
–

ge
n
er
al
ly
,c
as
h
an
d
ca
sh
eq
u
iv
al
en
ts
,i
n
ve
n
to
ri
es
,a
n
d
d
eb
to
rs

–

an
d
sh

or
t
te
rm
fi
n
an
ci
n
g,
su
ch
th
at
ca
sh
fl
ow
s
an
d
re
tu
rn
s

ar
e
ac
ce
p
ta
bl
e.

•
O
n
e
of
th
e
ob
je
ct
iv
es
w
it
h
in
w
or
ki
n
g
ca
p
it
al
m
an
ag
em
en
t

an
d
ge
n
er
al
fi
n
an
ci
n
g
d
ec
is
io
n
s
is
to
m
at
ch
th
e
m
at
u
ri
ty
of

li
ab
il
it
ie
s
w
it
h
th
e
li
fe
ex
p
ec
ta
n
cy
of
as
se
ts
.

•
If
th
e
m
at
u
ri
ty
of
li
ab
il
it
ie
s
is
le
ss
th
an
th
e
li
fe
ex
p
ec
ta
n
cy
of

as
se
ts
,a
fi
rm
fa
ce
s
re
fi
n
an
ci
n
g
ri
sk
si
n
ce
it
w
il
lh
av
e
to
ra
is
e

n
ew
ca
p
it
al
to
p
ay
of
fl
ia
bi
li
ti
es
.

C
h
o
o
si
n
g
a
P
o
li
cy

G
u
id
ed
by
cr
it
er
ia
m
ea
su
ri
n
g
ca
sh
fl
ow
,l
iq
u
id
it
y,
p
ro
fi
ta
bi
li
ty
,a
n
d

re
tu
rn
on
ca
p
it
al
,t
h
e
m
an
ag
em
en
t
of
a
fi
rm
w
il
lu
se
a
co
m
bi
n
at
io
n

of
p
ol
ic
ie
s
an

d
te
ch

n
iq
u
e

s
fo
r
th
e

m
an
ag
em
en
t
of
w
or
ki
n
g
ca
p
it
al
.

T
h
es
e
p
ol
ic
ie
s
ai
m
to
m
an
ag
e
th
e
cu
rr
en
t
as
se
ts
–
ge
n
er
al
ly
,c
as
h

an
d
ca
sh
eq
u
iv
al
en
ts
,i
n
ve
n
to
ri
es
an
d
d
eb
to
rs
–
an
d
th
e
sh
or
t
te
rm

86
6

fi
n
an
ci
n
g,
su
ch
th
at
ca
sh
fl
ow
s
an
d

re
tu
rn
s
ar
e
ac
ce
p
ta
bl
e.

A
s
w
it
h

an
y
d
ec
is
io
n
in
vo
lv
in
g
th
e
m
an
ag
em
en
t
of
ca
p
it
al
,t
h
e
fi
rm
‘s
go
al

sh
ou
ld
be
to
m
in
im
iz
e
th
e
ov
er
al
lc
os
t
of
ca
p
it
al
an
d
m
ax
im
iz
e
va
lu
e

to
th
e
sh
ar
eh
ol
d
er
s
(F
ig
u
re
17
.7
).
In
or
d
er
to
ef
fe
ct
iv
el
y
m
an
ag
e

ca
sh
fl
ow
,a
fi
rm
sh
ou
ld
id
en
ti
fy
th
e
ca
sh
ba
la
n
ce
w
h
ic
h
al
lo
w
s
fo
r

th
e
bu
si
n
es
s
to
m
ee
t
d
ay
to
d
ay
ex
p
en
se
s,
bu
t
re
d
u
ce
s
ca
sh
h
ol
d
in
g

co
st
s
–
i.e
.,
th
e
op
p
or
tu
n
it
y
co
st
of
h
ol
d
in
g
ca
sh
as
op
p
os
ed
to

in
ve
st
in
g
it
.

A
co
m
p
an
y
sh
ou
ld
al
so
id
en
ti
fy
th
e
le
ve
lo
fi
n
ve
n
to
ry
w
h
ic
h
al
lo
w
s

fo
r
u
n
in
te
rr
u
p
te
d
p
ro
d
u
ct
io
n
,b
u
t
re
d
u
ce
s
th
e
in
ve
st
m
en
t
in
ra
w

m
at
er
ia
ls
–
an
d
m
in
im
iz
es
re
or
d
er
in
g
co
st
s
–
an
d
th
er
ef
or
e

in
cr
ea
se
s
ca
sh
fl
ow
.A
n
ot
h
er
ar
ea
of
co
n
ce
rn
fo
r
a
fi
rm
w
il
lb
e

m
an
ag
in
g
d
eb
to
rs
.M
an
ag
em
en
t
sh
ou
ld
id
en
ti
fy
th
e
ap
p
ro
p
ri
at
e

cr
ed
it
p
ol
ic
y
so
th
at
an
y
im
p
ac
t
on
ca
sh
fl
ow
s
an
d
th
e
ca
sh

co
n
ve
rs
io
n
cy
cl
e
w
il
lb
e
of
fs
et
by
in
cr
ea
se
d
re
ve
n
u
e
an
d
re
tu
rn
on

ca
p
it
al
.M
or
eo
ve
r,
m
an
ag
em
en
t
sh
ou
ld
im
p
le
m
en
t
ap
p
ro
p
ri
at
e

cr
ed
it
sc
or
in
g
p
ol
ic
ie
s
an
d
te
ch
n
iq
u
es
so
th
at
th
e
ri
sk
of
d
ef
au
lt
on

an
y
n
ew
bu
si
n
es
s
is
ac
ce
p
ta
bl
e
gi
ve
n
th
es
e
cr
it
er
ia
.

A
fi
n
al
ar
ea
m
an
ag
em
en
t
sh
ou
ld
be
co
n
ce
rn
ed
w
it
h
w
h
en
d
ec
id
in
g

on
a
w
or
ki
n
g
ca
p
it
al
p
ol
ic
y
is
sh
or
t-
te
rm
fi
n
an
ci
n
g.
A
fi
rm
sh
ou
ld

id
en
ti
fy
th
e
ap
p
ro
p
ri
at
e
so
u
rc
e
of
fi
n
an
ci
n
g,
gi
ve
n
th
e
ca
sh

co
n
ve
rs
io
n
cy
cl
e.
In
ve
n
to
ry
is
id
ea
ll
y
fi
n
an
ce
d
by
cr
ed
it
gr
an
te
d
by

th
e
su
p
p
li
er
.H
ow
ev
er
,i
t
m
ay
be
n
ec
es
sa
ry
to
u
ti
li
ze
a
ba
n
k
lo
an
.

R
e
fi
n
a
n
ci
n
g
R
is
k

O
n
e
of
th
e
ob
je
ct
iv
es
w
it
h
in
w
or
ki
n
g
ca
p
it
al
m
an
ag
em
en
t
an
d

ge
n
er
al
fi
n
an
ci
n
g
d
ec
is
io
n
s
is
to
m
at
ch
th
e
m
at
u
ri
ty
of
li
ab
il
it
ie
s

w
it
h
th
e
li
fe
ex
p
ec
ta
n
cy
of
as
se
ts
.T
h
is
al
lo
w
s
li
ab
il
it
ie
s
to
be
se
lf
–

li
qu
id
at
in
g.
If
th
e
m
at
u
ri
ty
of
li
ab
il
it
ie
s
is
le
ss
th
an
th
e
li
fe

ex
p
ec
ta
n
cy
of
as
se
ts
,a
fi
rm
fa
ce
s
re
fi
n
an
ci
n
g
ri
sk
si
n
ce
it
w
il
lh
av
e

to
ra
is
e
n
ew
ca
p
it
al
to
p
ay
of
fl
ia
bi
li
ti
es
.I
ft
h
e
m
at
u
ri
ty
of
li
ab
il
it
ie
s

is
lo
n
ge
r
th
an
th
e
li
fe
ex
p
ec
ta
n
cy
of
as
se
ts
,t
h
en
th
er
e
sh
ou
ld
be

su
ff
ic
ie
n
t
w
or
ki
n
g
ca
p
it
al
av
ai
la
bl
e
to
p
ay
of
fd
eb
ts
.T
h
e

86
7

Th
is
ch

ar
t
la
ys

ou
t
sa

m
p
le

w
or
ki
ng

ca
p
ita

li
ss
ue

s
an

d
so

m
e
p
os

si
b
le

so
lu
tio

ns
.

Fi
g
ur
e
17

.7
P
ol
ic
ie
s
R
eg
ar
d
in
g
Li
q
ui
d
ity

m
is
m
at
ch
in
g
of
li
ab
il
it
ie
s
w
it
h
as
se
ts
ca
n
oc
cu
r
if
fi
n
an
ci
n
g
is
n
ot

av
ai
la
bl
e.

F
or
ex
am
p
le
,s
u
p
p
os
e
lo
n
g-
te
rm
fi
n
an
ci
n
g
is
n
ot
av
ai
la
bl
e.
Sh
or
t-

te
rm
so
u
rc
es
of
fi
n
an
ci
n
g
m
ay
h
av
e
to
be
u
se
d
.M
is
m
at
ch
in
g
ca
n

al
so
be
in
te
n
ti
on
al
.F
or
ex
am
p
le
,s
u
p
p
os
e
a
co
m
p
an
y
ex
p
ec
ts
lo
n
g-

te
rm
in
te
re
st
ra
te
s
to
fa
ll
.T
h
e
fi
rm
m
ay
w
an
t
to
fi
n
an
ce
as
se
ts
w
it
h

sh
or
t-
te
rm
m
at
u
ri
ti
es
si
n
ce
it
ca
n
re
fi
n
an
ce
in
a
fe
w
ye
ar
s
at
m
u
ch

lo
w
er
ra
te
.

So
u
rc
e:
ht
tp
s:
//
w
w
w
.b
ou
n
d
le
ss
.c
om
/f
in
a
n
ce
/i
n
tr
od
u
ct
io
n
-t
o-

w
or
ki
n
g
-c
a
p
it
a
l/
a
p
p
ro
a
ch
es
-t
o-
w
or
ki
n
g
-c
a
p
it
a
l-
fi
n
a
n
ci
n
g
/c
ho
os
in
g
–

a
-p
ol
ic
y/

C
C
-B
Y
-S
A

B
ou
n
d
le
ss
is
a
n
op
en
ly
li
ce
n
se
d
ed
u
ca
ti
on
a
lr
es
ou
rc
e

86
8

E
va

lu
at
in
g

In
te
re
st

R
at
es

D
ec

is
io
n
C
rit
er
ia

Id
en

tif
yi
ng

Va
ry
in
g

C
on

d
iti
on

C
al
cu

la
tin

g
E
xp

ec
te
d
Va

lu
e

Se
ct
io
n
3

W
or
ki
ng

C
ap

ita
lF

in
an

ci
ng

D
ec

is
io
n

O
ve

rv
ie
w

86
9

ht
tp
s:
//
w
w
w
.b
ou

nd
le
ss
.c
om

/
na

nc
e/
in
tr
od

uc
tio

n-
to
-w

or
ki
ng

-c
ap

ita
l/w

or
ki
ng

-c
ap

ita
l-
n

an
ci
ng

-d
ec

is
io
n-
ov

er
vi
ew

E
va

lu
at
in
g
In
te
re
st

R
at
es

M
an

ag
em

en
t
of

w
or
ki
ng

ca
p
ita

lr
eq

ui
re
s
ev

al
ua

tin
g

fa
ct
or
s
a

ec
tin

g
ca

sh
o

w
s
—

in
cl
ud

in
g
th
e
ev

al
ua

tio
n

of
ap

p
ro
p
ria

te
in
te
re
st

ra
te
s.

K
E
Y
P
O
IN
TS

•

T
h
e
in
te
re
st
ra
te
m
os
t
co
m
m
on
ly
u
se
d
in
w
or
ki
n
g
ca
p
it
al

m
an
ag
em
en
t
is
th
e
co
st
of
ca
p
it
al
.

•
F
ir
m
va
lu
e
is
en
h
an
ce
d
w
h
en
,a
n
d
if
,t
h
e
re
tu
rn
on
ca
p
it
al
,

w
h
ic
h
re
su
lt
s
fr
om
w
or
ki
n
g-
ca
p
it
al
m
an
ag
em
en
t,
ex
ce
ed
s
th
e

co
st
of
ca
p
it
al
,w
h
ic
h
re
su
lt
s
fr
om
ca
p
it
al
in
ve
st
m
en
t

d
ec
is
io
n
s.

•
W
or
ki
n
g
ca
p
it
al
d
ec
is
io
n
cr
it
er
ia
th
at
fo
cu
s
on
in
te
re
st
ra
te
s

in
cl
u
d
e
d
eb
to
rs
m
an
ag
em
en
t
an
d
sh
or
t-
te
rm
fi
n
an
ci
n
g.

E
va
lu
a
ti
n
g
In
te
re
st
R
a
te
s

T
h
e
m
an
ag
em
en
t
of
w
or
ki
n
g
ca
p
it
al
ta
ke
s
p
la
ce
in
th
e
re
al
m
of

sh
or
t-
te
rm
d
ec
is
io
n
-m
ak
in
g.
T
h
es
e
d
ec
is
io
n
s
ar
e,
th
er
ef
or
e,
ba
se
d

p
ri
m
ar
il
y
on
p
ro
fi
ta
bi
li
ty
,c
as
h
fl
ow
s
an
d
th
ei
r
m
an
ag
em
en
t.
M
an
y

cr
it
er
ia
go
in
to
th
e
m
an
ag
em
en
t
of
ca
sh
fl
ow
s
an
d
su
bs
eq
u
en
tl
y
th
e

m
an
ag
em
en
t
of
w
or
ki
n
g
ca
p
it
al
—
in
cl
u
d
in
g
th
e
ev
al
u
at
io
n
of

ap
p
ro
p
ri
at
e
in
te
re
st
ra
te
s
(F
ig
u
re
17
.8
).

T
h
e
in
te
re
st
ra
te
m
os
t
co
m
m
on
ly
u
se
d
in
w
or
ki
n
g
ca
p
it
al

m
an
ag
em
en
t
is
th
e
co
st
of
ca
p
it
al
.T
h
e
co
st
of
ca
p
it
al
,i
n
a
fi
n
an
ci
al

m
ar
ke
t
eq
u
il
ib
ri
u
m
,w
il
lb
e
th
e
sa
m
e
as
th
e
m
ar
ke
t
ra
te
of
re
tu
rn
on

th
e
fi
n
an
ci
al
as
se
t
m
ix
tu
re
th
e
fi
rm
u
se
s
to
fi
n
an
ce
ca
p
it
al

in
ve
st
m
en
t.
In
ot
h
er
w
or
d
s,
a
co
m
p
an
y’
s
co
st
of
ca
p
it
al
is
th
e
co
st
of

ob
ta
in
in
g
fu
n
d
s
fo
r
op
er
at
io
n
th
ro
u
gh
th
e
sa
le
of
eq
u
it
y
or
d
eb
t
in

th
e
m
ar
ke
tp
la
ce
.I
n
m
ar
ke
t
eq
u
il
ib
ri
u
m
,i
n
ve
st
or
s
w
il
ld
et
er
m
in
e

w
h
at
re
tu
rn
th
ey
ex
p
ec
t
fr
om
p
ro
vi
d
in
g
fu
n
d
s
to
a
co
m
p
an
y.
T
h
e

re
tu
rn
ex
p
ec
te
d
on
d
eb
t
d
ep
en
d
s
u
p
on
th
e
cr
ed
it
ra
ti
n
g
of
th
e

co
m
p
an
y,
w
h
ic
h
ta
ke
s
in
to
ac
co
u
n
t
a
n
u
m
be
r
of
fa
ct
or
s
to

d
et
er
m
in
e
h
ow
ri
sk
y
lo
an
in
g
fu
n
d
s
to
a
co
m
p
an
y
w
il
lb
e.
T
h
e
re
tu
rn

ex
p
ec
te
d
fr
om
eq
u
it
y
al
so
in
vo
lv
es
a
n
u
m
be
r
of
fa
ct
or
s,
u
su
al
ly

ce
n
te
re
d
ar
ou
n
d
th
e
op
er
at
io
n
of
th
e
co
m
p
an
y
an
d
it
s
p
ro
sp
ec
ts
fo
r

87
0

In
te
re
st

ra
te
s
of

w
or
ki
ng

ca
p
ita

l
n

an
ci
ng

ca
n
b
e

la
rg
el
y
a

ec
te
d
b
y

d
is
co

un
t
ra
te
,W

A
C
C

an
d
co

st
of

ca
p
ita

Fi
g
ur
e
17

.8
In
te
re
st

p
ro
fi
ta
bi
li
ty
.S
om
e
co
n
ve
n
ti
on
al
ra
te
s
of
re
tu
rn
ex
p
ec
te
d
fo
r
va
ri
ou
s

ty
p
es
of
co
m
p
an
ie
s
in
cl
u
d
e:

•
St
ar
tu
p
s
se
ek
in
g
m
on
ey
:5
0
%
–
10
0
%

•
E
ar
ly
st
ar
tu
p
s:
40
%
–
60
%

•
L
at
e
st
ar
tu
p
s:
30
%
–
50
%

•
M
at
u
re
co
m
p
an
ie
s:
10
%
–
25
%

W
h
en
ev
al
u
at
in
g
sh
or
t-
te
rm
p
ro
fi
ta
bi
li
ty
,c
om
p
an
y’
s
m
ay
u
se

m
ea
su
re
s
su
ch
as
re
tu
rn
on
ca
p
it
al
.R
O
C
is
sh
ow
n
as
a
p
er
ce
n
ta
ge
,

d
et
er
m
in
ed
by
d
iv
id
in
g
re
le
va
n
t
in
co
m
e
fo
r
th
e
12
m
on
th
s
by

ca
p
it
al
em
p
lo
ye
d
.F
ir
m
va
lu
e
is
en
h
an
ce
d
w
h
en
,a
n
d
if
,t
h
e
re
tu
rn

on
ca
p
it
al
,w
h
ic
h
re
su
lt
s
fr
om
w
or
ki
n
g-
ca
p
it
al
m
an
ag
em
en
t,

ex
ce
ed
s
th
e
co
st
of
ca
p
it
al
,w
h
ic
h
re
su
lt
s
fr
om
ca
p
it
al
in
ve
st
m
en
t

d
ec
is
io
n
s.
R
O
C
m
ea
su
re
s
ar
e
th
er
ef
or
e
u
se
fu
la
s
a
m
an
ag
em
en
t

to
ol
,i
n
th
at
th
ey
li
n
k
sh
or
t-
te
rm
p
ol
ic
y
w
it
h
lo
n
g-
te
rm
d
ec
is
io
n

m
ak
in
g.

A
s
m
en
ti
on
ed
,w
or
ki
n
g
ca
p
it
al
d
ec
is
io
n
s
ar
e
m
ad
e
w
it
h
th
e
sh
or
t-

te
rm
in
m
in
d
.T
h
u
s,
w
or
ki
n
g
ca
p
it
al
p
ol
ic
ie
s
ai
m
at
m
an
ag
in
g
th
e

cu
rr
en
t
as
se
ts
(g
en
er
al
ly
ca
sh
an
d
ca
sh
eq
u
iv
al
en
ts
,i
n
ve
n
to
ri
es
an
d

d
eb
to
rs
)
an
d
th
e
sh
or
t
te
rm
fi
n
an
ci
n
g,
su
ch
th
at
ca
sh
fl
ow
s
an
d

re
tu
rn
s
ar
e
ac
ce
p
ta
bl
e.
D
ec
is
io
n
cr
it
er
ia
th
at
fo
cu
s
on
in
te
re
st
ra
te
s

in
cl
u
d
e
d
eb
to
rs
m
an
ag
em
en
t
an
d
sh
or
t-
te
rm
fi
n
an
ci
n
g.

D
eb
to
rs
m
an
ag
em
en
t
in
vo
lv
es
id
en
ti
fy
in
g
th
e
ap
p
ro
p
ri
at
e
cr
ed
it

p
ol
ic
y
—
i.e
.c
re
d
it
te
rm
s
w
h
ic
h
w
il
la
tt
ra
ct
cu
st
om
er
s
—
su
ch
th
at

an
y
im
p
ac
t
on
ca
sh
fl
ow
s
an
d
th
e
ca
sh
co
n
ve
rs
io
n
cy
cl
e
w
il
lb
e

of
fs
et
by
in
cr
ea
se
d
re
ve
n
u
e
an

d
,h

en
ce
,r
et
u
rn
on
ca
p
it
al
(o
r
vi
ce

ve
rs
a)
.I
n
te
re
st
ra
te
s
ca
n
af
fe
ct
th
is
d
ec
is
io
n
be
ca
u
se
of
th
e
ti
m
e

lu
e
of

m
on
ey
.I
fi
n
fl
at
io
n
is
at
a
h
ig
h
le
ve
lo
r
th
er
e
ar
e

op
p
or
tu
n
it
ie
s
fo
re
go
n
e
be
ca
u
se
of
la
ck
of
w
or
ki
n
g
ca
p
it
al
,a
fi
rm

w
il
lm
or
e
th
an
li
ke
ly
h
av
e
a
st
ri
ct
er
cr
ed
it
p
ol
ic
y.

Sh
or
t-
te
rm
fi
n
an
ci
n
g
in
vo
lv
es
id
en
ti
fy
in
g
th
e
ap
p
ro
p
ri
at
e
so
u
rc
e
of

fi
n
an
ci
n
g,
gi
ve
n
th
e
ca
sh
co
n
ve
rs
io
n
cy
cl
e.
F
or
in
st
an
ce
,i
n
ve
n
to
ry

is
id
ea
ll
y
fi
n
an
ce
d
by
cr
ed
it
gr
an
te
d
by
th
e
su
p
p
li
er
;h
ow
ev
er
,i
t
m
ay

be
n
ec
es
sa
ry
to
u
ti
li
ze
a
ba
n
k
lo
an
or
to
“c
on
ve
rt
d
eb
to
rs
to
ca
sh
.”
.

A
n
ot
h
er
p
os
si
bl
e
so
lu
ti
on
is
to
u
se
se
rv
ic
es
fr
om
co
m
p
an
ie
s
se
ll

ou
ts
ta
n
d
in
g
in
vo
ic
es
to
ra
is
e
w
or
ki
n
g
ca
p
it
al
fo
r
th
ei
r
cl
ie
n
ts
.

O
bv
io
u
sl
y
in
te
re
st
ra
te
s
w
il
lp
la
y
a
vi
ta
lr
ol
e
in
d
et
er
m
in
in
g
w
h
et
h
er

an
op
ti
on
su
ch
as
a
ba
n
k
lo
an
is
vi
ab
le
fo
r
ob
ta
in
in
g
sh
or
t-
te
rm

fi
n
an
ci
n
g.

So
u
rc
e:
ht
tp
s:
//
w
w
w
.b
ou
n
d
le
ss
.c
om
/f
in
a
n
ce
/i
n
tr
od
u
ct
io
n
-t
o-

w
or
ki
n
g
-c
a
p
it
a
l/
w
or
ki
n
g
-c
a
p
it
a
l-
fi
n
a
n
ci
n
g
-d
ec
is
io
n
-o
ve
rv
ie
w
/

ev
a
lu
a
ti
n
g
-i
n
te
re
st
-r
a
te
s/

C
C
-B
Y
-S
A

B
ou
n
d
le
ss
is
a
n
op
en
ly
li
ce
n
se
d
ed
u
ca
ti
on
a
lr
es
ou
rc
e

87
1

D
ec

is
io
n
C
rit
er
ia

Th
e
m
ai
n
co

ns
id
er
at
io
ns

of
w
or
ki
ng

ca
p
ita

l
m
an

ag
em

en
t
d
ec

is
io
ns

ar
e
(1
)c

as
h
o

w
/
liq

ui
d
ity

an
d

(2
)p

ro
t
ab

ili
ty
/r
et
ur
n
on

ca
p
ita

K
E
Y
P
O
IN
TS

•
T
h
e
d
ec
is
io
n
s
re
la
ti
n
g
to
w
or
ki
n
g
ca
p
it
al
ar
e
al
w
ay
s
cu
rr
en
t

(i
.e
.,
sh
or
t-
te
rm
d
ec
is
io
n
s.

•
T
h
e
m
os
t
u
se
fu
lm
ea
su
re
of
p
ro
fi
ta
bi
li
ty
is
re
tu
rn
on
ca
p
it
al

(R
O
C
).

•
O
n
e
m
ea
su
re
of
ca
sh
fl
ow
is
p
ro
vi
d
ed
by
th
e
ca
sh
co
n
ve
rs
io
n

cy
cl
e
(C
C
C
)–
th
e
n
et
n
u
m
be
r
of
d
ay
s
fr
om
th
e
ou
tl
ay
of
ca
sh

fo
r
ra
w
m
at
er
ia
lt
o
re
ce
iv
in
g
p
ay
m
en
t
fr
om
th
e
cu
st
om
er
.

W
or
ki
n
g
ca
p
it
al
is
th
e
am
ou
n
t
of
ca
p
it
al
w
h
ic
h
is
re
ad
il
y
av
ai
la
bl
e

to
an
or
ga
n
iz
at
io
n
.T
h
at
is
,w
or
ki
n
g
ca
p
it
al
is
th
e
d
if
fe
re
n
ce

be
tw
ee
n
re
so
u
rc
es
in
ca
sh
or
re
ad
il
y
co
n
ve
rt
ib
le
in
to
ca
sh
(c
u
rr
en
t

as
se
ts
),
an
d
ca
sh
re
qu
ir
em
en
ts
(c
u
rr
en
t
li
ab
il
it
ie
s)
.A
s
a
re
su
lt
,t
h
e

d
ec
is
io
n
s
re
la
ti
n
g
to
w
or
ki
n
g
ca
p
it
al
ar
e
al
w
ay
s
cu
rr
en
t
(i
.e
.,
sh
or
t-

te
rm
d
ec
is
io
n
s)
.I
n
ad
d
it
io
n
to
th
e
ti
m
e
h
or
iz
on
,w
or
ki
n
g
ca
p
it
al

d
ec
is
io
n
s
d
if
fe
r
fr
om
ca
p
it
al
in
ve
st
m
en
t
d
ec
is
io
n
s
in
te
rm
s
of

d
is
co
u
n
ti
n
g
an
d
p
ro
fi
ta
bi
li
ty
co
n
si
d
er
at
io
n
s;
th
ey
ar
e
al
so

“r
ev
er
si
bl
e”
to
so
m
e
ex
te
n
t.

W
or
ki
n
g
ca
p
it
al
m
an
ag
em
en
t
d
ec
is
io
n
s
ar
e,
th
er
ef
or
e,
n
ot
m
ad
e
on

th
e
sa
m
e
ba
si
s
as
lo
n
g-
te
rm
d
ec
is
io
n
s,
an
d
w
or
ki
n
g
ca
p
it
al

m
an
ag
em
en
t
ap
p
li
es
d
if
fe
re
n
t
cr
it
er
ia
in
d
ec
is
io
n
m
ak
in
g:
th
e
m
ai
n

co
n
si
d
er
at
io
n
s
ar
e
(1
)
ca
sh
fl
ow
/l
iq
u
id
it
y
an
d
(2
)
p
ro
fi
ta
bi
li
ty
/

re
tu
rn
on
ca
p
it
al
(o
fw
h
ic
h
ca
sh
fl
ow
is
ge
n
er
al
ly
th
e
m
os
t

im
p
or
ta
n
t)
.

1.
C
a
sh
C
o
n
ve
rs
io
n
C
yc
le
(C
C
C
)

O
n
e
m
ea
su
re
of
ca
sh
fl
ow
is
p
ro
vi
d
ed
by
th
e
ca
sh
co
n
ve
rs
io
n
cy
cl
e—

th
e
n
et
n
u
m
be
r
of
d
ay
s
fr
om
th
e
ou
tl
ay
of
ca
sh
fo
r
ra
w
m
at
er
ia
lt
o

re
ce
iv
in
g
p
ay
m
en
t
fr
om
th
e
cu
st
om
er
.A
s
a
m
an
ag
em
en
t
to
ol
,t
h
is

m
et
ri
c
m
ak
es
ex
p
li
ci
t
th
e
in
te
rr
el
at
ed
n
es
s
of
d
ec
is
io
n
s
re
ga
rd
in
g

in
ve
n
to
ri
es
,a
cc
ou
n
ts
re
ce
iv
ab
le
an
d
p
ay
ab
le
,a
n
d
ca
sh
.B
ec
au
se
th
is

n
u
m
be
r
ef
fe
ct
iv
el
y
co
rr
es
p
on
d
s
to
th
e
ti
m
e
th
at
th
e
fi
rm
‘s
ca
sh
is

ti
ed
u
p
in
op
er
at
io
n
s
an
d
u
n
av
ai
la
bl
e
fo
r
ot
h
er
ac
ti
vi
ti
es
,

m
an
ag
em
en
t
ge
n
er
al
ly
ai
m
s
at
a
lo
w
n
et
co
u
n
t
(F
ig
u
re
17
.9
).

87
2

C
as

h
co

nv
er
si
on

cy
cl
e
is
a
m
ai
n

cr
ite

ria
fo
r
w
or
ki
ng

ca
p
ita

l
m
an

ag
em

en
t.

Fi
g
ur
e
17

.9
C
as
h

cy
cl
e

2
.
R
e
tu
rn
O
n
C
a
p
it
a
l
(R
O
C
)

In
th
is
co
n
te
xt
,t
h
e
m
os
t
u
se
fu
lm
ea
su
re
of
p
ro
fi
ta
bi
li
ty
is
re
tu
rn
on

ca
p
it
al
(R
O
C
).
T
h
e
re
su
lt
is
sh
ow
n
as
a
p
er
ce
n
ta
ge
,d
et
er
m
in
ed
by

d
iv
id
in
g
re
le
va
n
t
in
co
m
e
fo
r
th
e
12
m
on
th
s
by
ca
p
it
al
em
p
lo
ye
d
;

re
tu
rn
on
eq
u
it
y
(R
O
E
)
sh
ow
s
th
is
re
su
lt
fo
r
th
e
fi
rm
‘s

sh
ar
eh
ol
d
er
s.
F
ir
m
va
lu
e
is
en
h
an
ce
d
w
h
en
,a
n
d
if
,t
h
e
re
tu
rn
on

ca
p
it
al
,w
h
ic
h
re
su
lt
s
fr
om
w
or
ki
n
g-
ca
p
it
al
m
an
ag
em
en
t,
ex
ce
ed
s

th
e
co
st
of
ca
p
it
al
,w
h
ic
h
re
su
lt
s
fr
om
ca
p
it
al
in
ve
st
m
en
t
d
ec
is
io
n
s

as
ab
ov
e.
R
O
C
m
ea
su
re
s
ar
e,
th
er
ef
or
e,
u
se
fu
la
s
a
m
an
ag
em
en
t

to
ol
,i
n
th
at
th
ey
li
n
k
sh
or
t-
te
rm
p
ol
ic
y
w
it
h
lo
n
g-
te
rm
d
ec
is
io
n

m
ak
in
g.

C
re
d
it
p
o
li
cy

A
n
ot
h
er
fa
ct
or
af
fe
ct
in
g
w
or
ki
n
g
ca
p
it
al
m
an
ag
em
en
t
is
cr
ed
it

p
ol
ic
y
of
th
e
fi
rm
.I
t
in
cl
u
d
es
bu
yi
n
g
of
ra
w

m
at
er
ia
ls
an

d
se
ll
in
g
of

fi
n
is
h
ed
go
od
s
ei
th
er
in
ca
sh
or
on
cr
ed
it
.T
h
is
af
fe
ct
s
th
e
ca
sh

co
n
ve
rs
io
n
cy
cl
e.

So
u
rc
e:
ht
tp
s:
//
w
w
w
.b
ou
n
d
le
ss
.c
om
/f
in
a
n
ce
/i
n
tr
od
u
ct
io
n
-t
o-

w
or
ki
n
g
-c
a
p
it
a
l/
w
or
ki
n
g
-c
a
p
it
a
l-
fi
n
a
n
ci
n
g
-d
ec
is
io
n
-o
ve
rv
ie
w
/

d
ec
is
io
n
-c
ri
te
ri
a
/

C
C
-B
Y
-S
A

B
ou
n
d
le
ss
is
a
n
op
en
ly
li
ce
n
se
d
ed
u
ca
ti
on
a
lr
es
ou
rc
e

Id
en

tif
yi
ng

Va
ry
in
g

C
on

d
iti
on

s
M
an

ag
em

en
t
us

es
p
ol
ic
ie
s
an

d
te
ch

ni
q
ue

s
fo
r
th
e

m
an

ag
em

en
t
of

w
or
ki
ng

ca
p
ita

ls
uc

h
as

ca
sh

,
in
ve

nt
or
y,
d
eb

to
rs

an
d
sh

or
t
te
rm

n
an

ci
ng

K
E
Y
P
O
IN
TS

•
T
h
e
go
al
of
w
or
ki
n
g
ca
p
it
al
m
an
ag
em
en
t
is
to
en
su
re
th
at
th
e

fi
rm
is
ab
le
to
co
n
ti
n
u
e
it
s
op
er
at
io
n
s
an
d
th
at
it
h
as

su
ff
ic
ie
n
t
ca
sh
fl
ow
to
sa
ti
sf
y
bo
th
m
at
u
ri
n
g
sh
or
t-
te
rm
d
eb
t

an
d
u
p
co
m
in
g
op
er
at
io
n
al
ex
p
en
se
s.

•
Id
en
ti
fy
th
e
ca
sh
ba
la
n
ce
w
h
ic
h
al
lo
w
s
fo
r
th
e
bu
si
n
es
s
to

m
ee
t
d
ay
to
d
ay
ex
p
en
se
s,
bu
t
re
d
u
ce
s
ca
sh
h
ol
d
in
g
co
st
s.

•
Id
en
ti
fy
th
e
le
ve
lo
fi
n
ve
n
to
ry
w
h
ic
h
al
lo
w
s
fo
r
u
n
in
te
rr
u
p
te
d

p
ro
d
u
ct
io
n
bu
t
re
d
u
ce
s
th
e
in
ve
st
m
en
t
in
ra
w
m
at
er
ia
ls
–
an
d

m
in
im
iz
es
re
or
d
er
in
g
co
st
s
–
an
d
h
en
ce
in
cr
ea
se
s
ca
sh
fl
o

w
.

•
Id
en
ti
fy
th
e
ap
p
ro
p
ri
at
e
cr
ed
it
p
ol
ic
y
an
d
th
e
ap
p
ro
p
ri
at
e

so
u
rc
e
of
fi
n
an
ci
n
g,
gi
ve
n
th
e
ca
sh
co
n
ve
rs
io
n
cy
cl
e.

D
ec
is
io
n
s
re
la
ti
n
g
to
w
or
ki
n
g
ca
p
it
al
an
d
sh
or
t-
te
rm
fi
n
an
ci
n
g
ar
e

re
fe
rr
ed
to
as
w
or
ki
n
g
ca
p
it
al
m
an
ag
em
en
t.
T
h
es
e
in
vo
lv
e

m
an
ag
in
g
th
e
re
la
ti
on
sh
ip
be
tw
ee
n
a
fi
rm
‘s
sh
or
t-
te
rm
as
se
ts
an
d

87
3

it
s
sh
or
t-
te
rm
li
ab
il
it
ie
s.
T
h
e
go
al
of
w
or
ki
n
g
ca
p
it
al
m
an
ag
em
en
t
is

to
en
su
re
th
at
th
e
fi
rm
is
ab
le
to
co
n
ti
n
u
e
it
s
op
er
at
io
n
s
an
d
th
at
it

h
as
su
ff
ic
ie
n
t
ca
sh
fl
ow
to
sa
ti
sf
y
bo
th
m
at
u
ri
n
g
sh
or
t-
te
rm
d
eb
t

an
d
u
p
co
m
in
g
op
er
at
io
n
al
ex
p
en
se
s.

M
an
ag
em
en
t
w
il
lu
se
a
co
m
bi
n
at
io
n
of
p
ol
ic
ie
s
an
d
te
ch
n
iq
u
es
fo
r

th
e
m
an
ag
em
en
t
of
w
or
ki
n
g
ca
p
it
al
.T
h
e
p
ol
ic
ie
s
ai
m
at
m
an
ag
in
g

th
e
cu
rr
en
t
as
se
ts
(g
en
er
al
ly
ca
sh
an
d
ca
sh
eq
u
iv
al
en
ts
,i
n
ve
n
to
ri
es

an
d
d
eb
to
rs
)
an
d
th
e
sh
or
t-
te
rm
fi
n
an
ci
n
g,
su
ch
th
at
ca
sh
fl
ow
s
an
d

re
tu
rn
s
ar
e
ac
ce
p
ta
bl
e.

T
h
er
e
ar
e
fo
u
r
m
ai
n
ar
ea
s
of
va
ri
ab
il
it
y
th
at
m
u
st
be
m
an
ag
ed
.

1.
C
a
sh
m
a
n
a
g
e
m
e
n
t

Id
en
ti
fy
th
e
ca
sh
ba
la
n
ce
th
at
al
lo
w
s
fo
r
th
e
bu
si
n
es
s
to
m
ee
t
d
ay
–

to
-d
ay
ex
p
en
se
s,
bu
t
re
d
u
ce
s
ca
sh
h
ol
d
in
g
co
st
s.

2
.
In
ve
n
to
ry
m
a
n
a
g
e
m
e
n
t

Id
en
ti
fy
th
e
le
ve
lo
fi
n
ve
n
to
ry
th
at
al
lo
w
s
fo
r
u
n
in
te
rr
u
p
te
d

p
ro
d
u
ct
io
n
bu
t
re
d
u
ce
s
th
e
in
ve
st
m
en
t
in
ra
w
m
at
er
ia
ls
an
d

m
in
im
iz
es
re
or
d
er
in
g

co
st
s
an

d
,h
en
ce
,i
n
cr
ea
se
s
ca
sh
fl
ow
.B
es
id
es

th
is
,t
h
e
le
ad
ti
m
es
in
p
ro
d
u
ct
io
n
sh
ou
ld
be
lo
w
er
ed
to
re
d
u
ce
w
or
k

in
p
ro
ce
ss
(W
IP
)
an
d
si
m
il
ar
ly
,t
h
e
fi
n
is
h
ed
go
od
s
sh
ou
ld
be
ke
p
t

on
as
lo
w
le
ve
la
s
p
os
si
bl
e
to
av
oi
d
ov
er
p
ro
d
u
ct
io
n
(F
ig
u
re
17

.1
0

3
.
D
e
b
to
rs
m
a
n
a
g
e
m
e
n
t

Id
en
ti
fy
th
e
ap
p
ro
p
ri
at
e
cr
ed
it
p
ol
ic
y
(i
.e
.,
cr
ed
it
te
rm
s
w
h
ic
h
w
il
l

at
tr
ac
t
cu
st
om
er
s
su
ch
th
at
an
y
im
p
ac
t
on
ca
sh
fl
ow
s
an
d
th
e
ca
sh

co
n
ve
rs
io
n
cy
cl
e
w
il
lb
e
of
fs
et
by
in
cr
ea
se
d
re
ve
n
u
e
an
d
h
en
ce

re
tu
rn
on
ca
p
it
al
or
vi
ce
ve
rs
a)
.

4
.
S
h
o
rt
-t
e
rm
fi
n
a
n
ci
n
g

Id
en
ti
fy
th
e
ap
p
ro
p
ri
at
e
so
u
rc
e
of
fi
n
an
ci
n
g,
gi
ve
n
th
e
ca
sh

co
n
ve
rs
io
n
cy
cl
e.
T
h
e
in
ve
n
to
ry
is
id
ea
ll
y
fi
n
an
ce
d
by
cr
ed
it
gr
an
te
d

87
4

Id
en

tif
y
th
e
le
ve

lo
f

in
ve

nt
or
y
w
hi
ch

al
lo
w
s
fo
r

un
in
te
rr
up

te
d

p
ro
d
uc

tio
n
b
ut

re
d
uc

es
th
e

in
ve

st
m
en

t
in

ra
w

m
at
er
ia
ls
an

d
m
in
im

iz
es

re
or
d
er
in
g

co
st
s
an

d
,h

en
ce

,
in
cr
ea

se
s
ca

sh
o

w
.

Fi
g
ur
e
17

.1
0

In
ve
nt
or
y

by
th
e
su
p
p
li
er
;h
ow
ev
er
,i
t
m
ay
be
n
ec
es
sa
ry
to
u
ti
li
ze
a
ba
n
k
lo
an

(o
r
ov
er
d
ra
ft
),
or
to
“c
on
ve
rt
d
eb
to
rs
to
ca
sh
”
th
ro
u
gh
“f
ac
to
ri
n
g.
”

So
u
rc
e:
ht
tp
s:
//
w
w
w
.b
ou
n
d
le
ss
.c
om
/f
in
a
n
ce
/i
n
tr
od
u
ct
io
n
-t
o-

w
or
ki
n
g
-c
a
p
it
a
l/
w
or
ki
n
g
-c
a
p
it
a
l-
fi
n
a
n
ci
n
g
-d
ec
is
io
n
-o
ve
rv
ie
w
/

id
en
ti
fy
in
g
-v
a
ry
in
g
-c
on
d
it
io
n
s/

C
C
-B
Y
-S
A

B
ou
n
d
le
ss
is
a
n
op
en
ly
li
ce
n
se
d
ed
u
ca
ti
on
a
lr
es
ou
rc
e

C
al
cu

la
tin

g
E
xp

ec
te
d
Va

lu
e

Th
e
m
ai
n
ac

co
un

ts
w
hi
ch

a
ec

t
th
e
va

lu
e
of

w
or
ki
ng

ca
p
ita

la
re

ac
co

un
ts

re
ce

iv
ab

le
,i
nv

en
to
ry
,a

nd
ac

co
un

ts
p
ay

ab
le
.

K
E
Y
P
O
IN
TS

•
P
os
it
iv
e
w
or
ki
n
g
ca
p
it
al
is
re
qu
ir
ed
to
en
su
re
th
at
a
fi
rm
is

ab
le
to
co
n
ti
n
u
e
it
s
op
er
at
io
n
s
an
d
th
at
it
h
as
su
ff
ic
ie
n
t
fu
n
d
s

to
sa
ti
sf
y
bo
th
m
at
u
ri
n
g
sh
or
t-
te
rm
d
eb
t
an
d
u
p
co
m
in
g

op
er
at
io
n
al
ex
p
en
se
s.

•
T
h
e
m
an
ag
em
en
t
of
w
or
ki
n
g
ca
p
it
al
in
vo
lv
es
m
an
ag
in
g

in
ve
n
to
ri
es
,a
cc
ou
n
ts
re
ce
iv
ab
le
an
d
p
ay
ab
le
,a
n
d
ca
sh
.

•
C
u
rr
en
t
as
se
ts
an
d
cu
rr
en
t
li
ab
il
it
ie
s
in
cl
u
d
e
th
re
e
ac
co
u
n
ts

w
h
ic
h
ar
e
of
sp
ec
ia
li
m
p
or
ta
n
ce
:a
cc
ou
n
ts
re
ce
iv
ab
le
,

in
ve
n
to
ry
,a
n
d
ac
co
u
n
ts
p
ay
ab
le
.

•
W
or
ki
n
g
ca
p
it
al
is
eq
u
al
to
ac
co
u
n
ts
re
ce
iv
ab
le
p
lu
s
th
e
va
lu
e

of
in
ve
n
to
ry
,m
in
u
s
ac
co
u
n
ts
p
ay
ab
le
.

W
or
ki
n
g
ca
p
it
al
(W
C
)
is
a
fi
n
an
ci
al
m
et
ri
c
w
h
ic
h
re
p
re
se
n
ts

op
er
at
in
g
li
qu
id
it
y
av
ai
la
bl
e
to
a
bu
si
n
es
s,
or
ga
n
iz
at
io
n
,o
r
ot
h
er

en
ti
ty
–
in
cl
u
d
in
g
a
go
ve
rn
m
en
ta
le
n
ti
ty
.A
lo
n
g
w
it
h
fi
xe
d
as
se
ts

su
ch
as
p
la
n
t
an
d
eq
u
ip
m
en
t,
w
or
ki
n
g
ca
p
it
al
is
co
n
si
d
er
ed
a
p
ar
t
of

op
er
at
in
g
ca
p
it
al
.N
et
w
or
ki
n
g
ca
p
it
al
is
ca
lc
u
la
te
d
as
cu
rr
en
t
as
se
ts

m
in
u
s
cu
rr
en
t
li
ab
il
it
ie
s.
It
is
a
d
er
iv
at
io
n
of
w
or
ki
n
g
ca
p
it
al
th
at
is

87
5

co
m
m
on
ly
u
se
d
in
va
lu
at
io
n
te
ch
n
iq
u
es
,s
u
ch
as
D
C
F
s
(D
is
co
u
n
te
d

C
as
h
F
lo
w
s)
.I
fc
u
rr
en
t
as
se
ts
ar
e
le
ss
th
an
cu
rr
en
t
li
ab
il
it
ie
s,
an

en
ti
ty
h
as
a

w
or
ki
n
g
ca
p
it
al
d
ef
ic
ie
n
cy
,a
ls
o
ca
ll
ed
a
“w
or
ki
n
g
ca
p
it
al
d
ef
ic
it
.”

A
co
m
p
an
y
ca
n
be
en
d
ow
ed
w
it
h
as
se
ts
an
d
p
ro
fi
ta
bi
li
ty
bu
t
sh
or
t

on
li
qu
id
it
y
if
it
s
as
se
ts
ca
n
n
ot
re
ad
il
y
be
co
n
ve
rt
ed
in
to
ca
sh
.

P
os
it
iv
e
w
or
ki
n
g
ca
p
it
al
is
re
qu
ir
ed
to
en
su
re
th
at
a
fi
rm
is
ab
le
to

co
n
ti
n
u
e
it
s
op
er
at
io
n
s
an
d
th
at
it
h
as
su
ff
ic
ie
n
t
fu
n
d
s
to
sa
ti
sf
y

bo
th
m
at
u
ri
n
g
sh
or
t-
te
rm
d
eb
t
an
d
u
p
co
m
in
g
op
er
at
io
n
al
ex
p
en
se
s.

T
h
e
m
an
ag
em
en
t
of
w
or
ki
n
g
ca
p
it
al
in
vo
lv
es
m
an
ag
in
g
in
ve
n
to
ri
es
,

ac
co
u
n
ts
re
ce
iv
ab
le
an
d
p
ay
ab
le
,a
n
d
ca
sh
.

C
a
lc
u
la
ti
o
n

C
u
rr
en
t
as
se
ts
an
d
cu
rr
en
t
li
ab
il
it
ie
s
in
cl
u
d
e
th
re
e
ac
co
u
n
ts
w
h
ic
h

ar
e
of
sp
ec
ia
li
m
p
or
ta
n
ce
.T
h
es
e
ac
co
u
n
ts
re
p
re
se
n
t
th
e
ar
ea
s
of
th
e

bu
si
n
es
s
w
h
er
e
m
an
ag
er
s
h
av
e
th
e
m
os
t
d
ir
ec
t
im
p
ac
t:

•
ac
co
u
n
ts
re
ce
iv
ab
le
(c
u
rr
en
t
as
se
t)

•
in
ve
n
to
ry
(c
u
rr
en
t
as
se
ts
)

•
ac
co
u
n
ts
p
ay
ab
le
(c
u
rr
en
t
li
ab
il
it
y)

T
h
er
ef
or
e,
in
th
is
co
n
te
xt
,w
e
ca
lc
u
la
te
av
ai
la
bl
e
w
or
ki
n
g
ca
p
it
al

u
si
n
g
th
e
fo
ll
ow
in
g
fo
rm
u
la
(F
ig
u
re
17
.1
1)
:

T
h
es
e
va
lu
es
ca
n
be
re
ad
il
y
fo
u
n
d
on
a
co
m
p
an
y’
s
ba
la
n
ce
sh
ee
t.

T
h
e
cu
rr
en
t
p
or
ti
on
of
d
eb
t
(p
ay
ab
le
w
it
h
in
12
m
on
th
s)
is
cr
it
ic
al
,

be
ca
u
se
it
re
p
re
se
n
ts
a
sh
or
t-
te
rm
cl
ai
m
to
cu
rr
en
t
as
se
ts
an
d
is

of
te
n
se
cu
re
d
by
lo
n
g-
te
rm
as
se
ts
.C
om
m
on
ty
p
es
of
sh
or
t-
te
rm

d
eb
t
ar
e
ba
n
k
lo
an
s
an
d
li
n
es
of
cr
ed
it
.

A
s
an
ex
am
p
le
,i
m
ag
in
e
a
co
m
p
an
y
h
as
ac
co
u
n
ts
re
ce
iv
ab
le
of

$
10
,0
0
0
,c
u
rr
en

t
in
ve

n
to
ry
th
at
h
as
a
va
lu
e
of
$
5,
0
0
0
,a
n
d
ac
co
u
n
ts

p
ay
ab
le
of
$
7,
0
0
0
.W
e
ca
n
fi
n
d
w
or
ki
n
g
ca
p
it
al
by
:

W
or
ki
n
g
C
ap
it
al
=
$
10
,0
0
0
+
$
5,
0
0
0
–
$
7,
0
0
0
=
$
8
,0
0
0

A
n
in
cr
ea
se
in
w
or
ki
n
g
ca
p
it
al
in
d
ic
at
es
th
at
th
e
bu
si
n
es
s
h
as
ei
th
er

in
cr
ea
se
d
cu
rr
en
t
as
se
ts
(t
h
at
it
h
as
in
cr
ea
se
d
it
s
re
ce
iv
ab
le
s,
or

ot
h
er
cu
rr
en
t
as
se
ts
)
or
h
as
d
ec
re
as
ed
cu
rr
en
t
li
ab
il
it
ie
s,
fo
r

ex
am
p
le
,h
as
p
ai
d
of
fs
om
e
sh
or
t-
te
rm
cr
ed
it
or
s.

Im
p
li
ca
ti
o
n
s
o
n
M
&
A

T
h
e
co
m
m
on
co
m
m
er
ci
al
d
ef
in
it
io
n
of
w
or
ki
n
g
ca
p
it
al
fo
r
th
e

p
u
rp
os
e
of
a
w
or
ki
n
g
ca
p
it
al
ad
ju
st
m
en
t
in
a
m
er
ge
rs
an
d

ac
qu
is
it
io
n
s
tr
an
sa
ct
io
n
(i
.e
.,
fo
r
a
w
or
ki
n
g
ca
p
it
al
ad
ju
st
m
en
t

m
ec
h
an
is
m
in
a
sa
le
an
d
p
u
rc
h
as
e
ag
re
em
en
t)
is
eq
u
al
to
:

87
6

W
or
ki
ng

ca
p
ita

li
s
eq

ua
lt
o
ac

co
un

ts
re
ce

iv
ab

le
,p

lu
s
cu

rr
en

t
in
ve

nt
or
y,
m
in
us

ac
co

un
ts

p
ay

ab
le
.

Fi
g
ur
e
17

.1
1
W
or
ki
ng

C
ap
ita
lE
q
ua
tio
n

C
u
rr
en
t
A
ss
et
s
–
C
u
rr
en
t
li
ab
il
it
ie
s
(e
xc
lu
d
in
g
d
ef
er
re
d
ta
x
as
se
ts
/

li
ab
il
it
ie
s,
ex
ce
ss
ca
sh
,s
u
rp
lu
s
as
se
ts
,a
n
d
/o
r
d
ep
os
it
ba
la
n
ce
s)
.

C
as
h
ba
la
n
ce
it
em
s
of
te
n
at
tr
ac
t
a
on
e-
fo
r-
on
e
p
u
rc
h
as
e-
p
ri
ce

ad
ju
st
m
en
t.

So
u
rc
e:
ht
tp
s:
//
w
w
w
.b
ou
n
d
le
ss
.c
om
/f
in
a
n
ce
/i
n
tr
od
u
ct
io
n
-t
o-

w
or
ki
n
g
-c
a
p
it
a
l/
w
or
ki
n
g
-c
a
p
it
a
l-
fi
n
a
n
ci
n
g
-d
ec
is
io
n
-o
ve
rv
ie
w
/

ca
lc
u
la
ti
n
g
-e
xp
ec
te
d
-v
a
lu
e/

C
C
-B
Y
-S
A

B
ou
n
d
le
ss
is
a
n
op
en
ly
li
ce
n
se
d
ed
u
ca
ti
on
a
lr
es
ou
rc
e

87
7

Chapter 18 “Working Capital Management” from Finance by Boundless is used under the terms of
the Creative Commons Attribution-ShareAlike 3.0 Unported license. © 2014, boundless.com. UMGC
has modified this work and it is available under the original license

UMGC– Retrieved from https://leocontent.umgc.edu/conten

dam/equella-content/finc331/
Chapter18WorkingCapitalManagement

a
p
t

r
18

W
or
ki
ng

C
ap

ita
l

M
an

ag
em

ht
tp
s:
//
w
w
w
.b
ou

.c
om

/
na

nc
e/
w
or
ki
ng

-c
ap

ita
l-

m
an

ag
em

en
t

R
ea

so
ns

fo
r
M
ai
nt
ai

ni
ng

C
as

h
on

H
an

D
e

ni
ng

th
e
C
as

h
Fl
ow

C
yc

C
al
cu

la
tin

g
th
e
C
as

h
Fl
ow

C
yc

Th
e
C
as

h
B
ud

ge
t

C
om

p
on

Se
ct
io
n
1

Th
e
Im

p
or
ta
nc

e
of

C
as

87
9

ht
tp
s:
//
w
w
w
.b
ou

nd
le
ss
.c
om

/
na

nc
e/
w
or
ki
ng

-c
ap

ita
l-
m
an

ag
em

en
t/
th
e-
im

p
or
ta
nc

e-
of
-c
as

R
ea

so
ns

fo
r
M
ai
nt
ai
ni
ng

C
as

h
on

H
an

d
Th

e
m
ai
n
re
as

on
a

b
us

in
es

s
m
ai
nt
ai
ns

ca
sh

on
ha

nd
is

to
m
ee

t
n

an
ci
al

ob
lig

at
io
ns

K
E
Y
P
O
IN
TS

•
L
iq
u
id
it
y
is
th
e
ab
il
it
y
to
m
ee
t
ob
li
ga
ti
on
s
w
h
en
th
ey
co
m
e

d
u
e
w
it
h
ou

t
in

cu
rr

in
g

u
n
ac
ce
p
ta
bl
e
lo
ss
es
.

•
B
an
ks
ca
n
ge
n
er
al
ly
m
ai
n
ta
in
as
m
u
ch
li
qu
id
it
y
as
d
es
ir
ed
,

e
ca

u
se
ba
n
k

d
ep

os
it
s
ar
e
in
su
re
d
by
go
ve
rn

m
en

s
in

m
os
t

d
ev
el
op
ed
co
u
n
tr
ie

•
B
an
ks
ca
n
at
tr
ac
t

si
gn

if
ic
an
t
li
qu
id
fu
n

d
s
to

ge
n
er
at
e
st
ro
n
ge
r

p
ro
fi
ts
,m
or
e
st
ab
il
it
y,

an
d

m
or

e
co

n
fi
d
en
ce
am
on
g

d
ep
os
it
or
s,

in
ve

st
or

s,
an

d
re
gu
la
to
rs
.

•
C
as

h
is
th
e
m
os

t
li
qu
id
as
se
t
an

d
ca

n
be
u

se
d

im
m
ed
ia
te
ly
to

p
er
fo
rm
ec
on
om
ic
ac
ti
on
s
li
ke
bu
yi
n
g,
se
ll
in
g,
or
p
ay
in
g
d
eb
t,

an
d
m
ee
ti
n
g
im
m
ed
ia
te

w
an

ts
an

d
n
ee
d
s.

In
bu
si
n
es
s,
ec
on
om
ic
s,
or
in
ve

st
m
en

t,
m
ar
ke
t
li
qu
id
it
y
is
an
as
se
t’s

ab
il
it
y
to
be
so
ld
w
it
h

ou
t

ca
u
si
n
g
a
si
gn
if
ic
an
t
m
ov
em

en
t

in
th
e

p
ri
c

e
an

d
w
it
h

m
in
im

u
m
lo
s

s
of

va
lu
e.
M
on
ey
,o
r
ca
sh
,i
s
th
e
m
os
t

li
qu
id
as
se
t,
an
d
ca
n
be
u
se
d
im
m
ed
ia
te
ly
to
p
er
fo
rm
ec
on
om
ic

ac
ti
on
s
li
ke
bu
yi
n
g,
se
ll
in
g,
p
ay
in
g
d
eb
t,
an
d
m
ee
ti
n
g
im
m
ed
ia
te

w
an
ts
an
d
n
ee
d
s.

In
bo
ok

ke
ep

in
g
an
d

ac
co

u
n
ti
n
g,
ca
sh
re
fe
rs
to
cu

rr
en

t
as

se
ts

co
m
p
ri
si
n
g
cu
rr

en
cy

or
cu
rr
en
cy
eq
u
iv
al

en
ts

at
ca

n
be
ac
ce
ss
ed

im
m
ed
ia
te
ly
or
n
ea
r
im
m
ed
ia
te
ly
(a
s
in
th
e
ca
se
of
m
on
ey
m
ar
ke
t

ac
co
u
n
ts
).
C
as
h
is
se
en
as
a
re
se
rv
e
fo
r
p
ay
m
en
ts
an
d
as
a
w
ay
to

m
ee
t
fi
n
an
ci
al
ob
li
ga
ti
on
s
(F
ig
u
re
18
.1
).

In
ba
n
ki
n
g,
li
qu
id
it
y
is
th
e
ab
il
it
y
to
m
ee
t
ob
li
ga
ti
on
s
w
h
en
th
ey

co
m
e
d
u
e
w
it
h
ou
t
in
cu
rr
in
g
u
n
ac
ce
p
ta
bl
e
lo
ss
es
.M

an
ag

in
g
li
qu
id
it
y

is
a
d
ai
ly

p
ro
ce

ss
re
qu
ir
in
g
ba
n
ke
rs
to
m
on
it
or
an
d
p
ro
je
ct
ca
sh

fl
ow
s
to
en
su
re
ad
eq
u
at
e
li
qu
id
it
y
is
m
ai
n
ta
in
ed
.M
ai
n
ta
in
in
g
a

ba
la
n
ce
be
tw
ee

n
sh

or
t-
te
rm
as
se
ts
an
d
sh
or
t-
te
rm
li
ab
il
it
ie
s
is

C
as

h
is
th
e
m
os

t
liq

ui
d
as

Fi
g
ur
e
18

.1
C
as
h

cr
it
ic
al
.F
or
an
in
d
iv
id
u
al
ba
n
k,
cl
ie
n
ts
‘d
ep
os
it
s
ar
e
it
s
p
ri
m
ar
y

li
ab
il
it
ie
s
(i
n
th
e
se
n
se

th
at

th
e
ba
n
k
is
m
ea
n

t
to

gi
ve
ba
ck
al
lc
li
en
t

d
ep
os
it
s
on
d
em
an
d
),
w
h
er
ea
s
re
se
rv
es
an
d
lo
an
s
ar
e
it
s
p
ri
m
ar
y

as
se
ts
(i
n
th
e
se
n
se
th
at
th
es
e
lo
an
s
ar
e
ow
e

d
to

th
e
ba
n
k,
n
ot
by
th
e

ba
n
k)
.T
h
e
in
ve
st
m
en
t
p
or
tf
ol
io
re
p
re
se
n
ts
a
sm
al
le
r
p
or
ti
on
of

as
se
ts
,a
n
d
se
rv
es
as
th
e
p
ri
m
ar
y
so
u
rc
e
of
li
qu
id
it
y.

In
ve

st
m
en
t

se
cu

ri
ti
es
ca
n
be
li
qu
id
at
ed
to
sa
ti
sf
y
d
ep
os
it
w
it
h
d

ra
w

al
s
an
d

cr
ea

se
d
lo
an
d
em
an
d
.B
an
ks
h
av
e
se
ve
ra
la
d
d
it
io
n
al
op
ti
on
s
fo
r

ge
n
er
at
in
g
li
qu
id
it
y,
su
ch
as
se
ll
in
g
lo
an
s,
bo
rr
ow
in
g

fr
om

ot
h
er

ba
n
ks
,b
or
ro
w
in
g
fr
om
a
ce
n
tr
al
ba
n
k,
su
ch
as
th
e
U
.S
.F
ed
er
al

R
es
er
ve
B
an
k,
an
d
ra
is
in
g
ad
d
it
io
n
al
ca
p
it
al
.I
n
a
w
or
st
ca
se

sc
en
ar
io
,d
ep
os
it
or
s
m
ay
d
em
an
d

th
ei
r

fu
n
d
s
w
h
en
th
e
ba
n
k
is

u
n
a

b
le

to
ge
n
er
at
e
ad
eq
u
at
e
ca
sh
w
it
h
ou
t
in
cu
rr
in
g
su
bs
ta
n
ti
al

fi
n
an
ci
al
lo
ss
es
.I
n
se
ve
re
ca
se
s,
th
is
m
ay
re
su
lt

in
a

ba
n
k
ru
n
.

M
os

ba
n
ks
ar
e
su
bj
ec
t
to
le
ga
ll

y
m
an

d
at
ed
re
qu
ir

em
en

ts
in
te
n
d
ed
to

h
el
p
ba
n
ks
av
oi
d
a
li
qu
id
it
y
cr

is
is

So
u
rc
e:
ht
tp
s:
//
w
w
w
.b
ou
n
d
le
ss
.c
om
/f
in
a
n
ce
/w
or
ki
n
g
-c
a
p
it
a
l-

m
a
n
a
g
em
en
t/

th
e-
im
p
or
ta
n
ce
-o
f-
ca
sh
/r
ea
so
n
s-
fo
r-
m
a
in
ta
in
in
g
-c
a
sh
–

on
-h
a
n
d
/

C
C
-B
Y
-S
A

B
ou
n
d
le
ss
is
a
n
o

p
en

ly
li
ce
n
se
d
ed
u
ca
ti
on
a
lr
es
ou
rc
e

D
e

ni
ng

th
e
C
as

h
Fl
ow

C
yc

le
Th

e
ca

h
o

w
cy

cl
e
m
ea

re
s
ho

lo
ng

it
ta
ke

s
fo
r
a

r
m

to
re
co

ve
r
ca

sh
th
at

it
in
ve

st
s

on
go

in
g

op
er
at
io
ns

K
E
Y
P
O
IN
TS

•
In

m
an
ag
em

en
t
ac
co
u
n
ti
n
g,
th
e
ca
s

h
co

n
ve
rs
io
n

cy
cl
e

(C
C
C
)

ea
su

re
s
h
ow
lo
n
g
a
fi
rm
w
il
lb
e
d
ep
ri
ve
d

of
ca

sh
if
it

in
cr
ea
se
s
it
s
in
ve
st
m
en
t
in

re
so

u
rc
es
in

or
d
er

to
ex

p
an

st
om

er
sa

le
s.

•
I

t
is

th
u
s
a
m
ea
su
re
of
th
e
li
qu
id
it
y
ri
sk
en
ta
il
ed
by
gr
ow
th
.

H
ow
ev
er
,s
h
or
te
n
in
g
th
e
C
C
C
cr
ea
te
s
it
s
ow
n
ri
sk
s.
W
h
il
e
a

fi
rm
co
u
ld
ev
en
ac
h
ie
ve
a
n
eg
at
iv
e
C
C
C
by
co
ll
ec
ti
n
g
fr
om

cu
st
om

er
s

be
fo
re
p
ay
in
g
su
p
p
li
er
s,
a
p
ol
ic
y
of
st
ri
ct

co
ll
ec
ti
on
s
an
d
la
x
p
ay
m
en
ts
is
n
ot
al
w
ay
s
su
st
ai
n
ab
le
.

•
T
h
e
te
rm
“c
as
h
co
n
ve
rs
io
n
cy
cl
e”
re
fe
rs
to
th
e
ti
m
es
p
an

be
tw
ee
n
a
fi
rm
‘s
d
is
bu
rs
in
g

an
d
co

ll
ec
ti
n
g
ca
sh
.

•
Si
n
ce
a
re
ta
il
er
‘s
op
er
at
io
n
s
co
n
si
s

t
of

bu
yi
n
g
an
d
se
ll
in
g

in
ve
n
to
ry
,t
h
e
eq
u
at
io
n
m
od
el
s
th
e
ti
m
e
be
tw
ee
n
(1
)

d
is
bu
rs
in
g
ca
sh
to
sa
ti
sf
y
th
e
ac
co
u
n
ts
p
ay
ab
le
cr
ea
te
d
by

p
u
rc
h
as
e
of
in
ve
n
to
ry
,a
n
d
(2
)
co
ll
ec
ti
n
g
ca
sh
to
sa
ti
sf
y
th
e

ac
co
u
n
ts
re
ce

iv
ab

le
ge
n
er
at
ed

by
th
at
sa
le
.

C
as
h
fl
ow
cy
cl
e
al
so
is
ca
ll
ed
“c
as
h
co
n
ve
rs
io
n
cy
cl
e”
(C
C
C
).
In

m
an
ag
em
en
t
ac
co
u
n
ti
n
g,
th
e
C
C
C
m
ea
su
re
s
h
ow
lo
n
g
a
fi
rm
w
il
lb
e

88
1

d
ep
ri
ve
d
of
ca
sh
if
it
in
cr
ea
se
s
it
s
in
ve
st
m
en
t
in
re
so
u
rc
es
in
or
d
er

to
ex
p
an

d
cu

st
om
er

sa
le
s.

It
is
th
u
s
a
m
ea
su
re
of
th
e
li
qu
id
it
y
ri
sk

en
ta
il
ed
by
gr
ow
th
.H
ow
ev
er
,s
h
or
te
n
in
g
th
e
C
C
C
cr
ea
te
s
it
s
ow
n

ri
sk
s:
w
h
il
e
a
fi
rm
co
u
ld
ev
en
ac
h
ie
ve
a
n
eg
at
iv
e
C
C
C
by
co
ll
ec
ti
n
g

fr
om
cu
st
om
er
s
be
fo
re
p
ay
in
g
su
p
p
li
er
s,
a
p
ol
ic
y
of
st
ri
ct
co
ll
ec
ti
on
s

an
d
la
x
p
ay
m
en
ts
is
n
ot
al
w
ay
s
su
st
ai
n
ab
le
(F
ig
u
re
18
.2
).

C
a
sh
C
o
n
ve
rs
io
n
C
yc
le

T
h
e
ca
sh
co
n
ve
rs
io
n
cy
cl
e
re
fe
rs
to
th
e
ti
m
e
fr
am
e
be
tw
ee
n
a
fi
rm
‘s

ca
sh
d
is
bu
rs
em
en
t
an
d
ca
sh
co
ll
ec
ti
on
.H
ow
ev
er
,t
h
e
C
C
C
ca
n
n
ot
be

d
ir
ec
tl
y
ob
se
rv

ed
in

ca
sh
fl
ow
s,
be
ca
u
se
th
es
e
ar
e
al
so
in
fl
u
en
ce
d
by

in
ve
st
m
en
t
an
d
fi
n
an
ci
n
g
ac
ti
vi
ti
es
;i
t
m
u
st
be
d
er

iv
ed

fr
om

st
at
em
en
t
of
fi
n
an
ci
al
p
os
it
io
n
or
ba
la
n
ce
sh
ee
t
d
at
a
as
so
ci
at
ed
w
it
h

th
e
fi
rm
‘s
op
er
at
io
n
s.

R
e
ta
il

A
lt
h
ou
gh

th
e
te
rm

“c
as
h
co
n
ve
rs
io
n
cy
cl
e”

te
ch

n
ic
al
ly
ap
p
li

es
to

fi
rm
in
an
y
in
d
u
st
ry
,t
h
e
eq
u
at
io
n
is
fo
rm
u
la
te
d
to
ap
p
ly
sp
ec
if
ic
al
ly

to
a
re
ta
il
er
.S
in
ce
a
re
ta
il
er
‘s
op
er
at
io
n
s
co
n
si
st
of
bu
yi
n
g
an
d

se
ll
in
g
in
ve
n
to
ry
,t
h
e
eq
u
at
io
n
m
od
el
s
th
e
ti
m
e
be
tw
ee
n
th
e

fo
ll
ow
in
g:

1.
D
is
bu
rs
in
g
ca
sh
to
sa
ti
sf
y
th
e
ac
co
u
n
ts
p
ay
ab
le
cr
ea
te
d
by

p
u
rc
h
as
e
of
in
ve
n
to
ry
;a
n
d

2.
C
ol
le
ct
in
g
ca
sh
to
sa
ti
sf
y
th
e
ac
co
u
n
ts
re
ce
iv
ab
le
ge
n
er
at
ed

by
th
at
sa
le
.

T
h
e
C
C
C
m
u
st
be
ca
lc
u
la
te
d
by
tr
ac
in
g
a
ch
an
ge
in
ca
sh
th
ro
u
gh
it
s

ef
fe
ct
u
p
on
re
ce
iv
ab

le
s,

in
ve
n
to
ry
,p
ay
ab
le
s,
an
d
fi
n
al
ly
ba
ck
to

ca
sh
,t
h
u
s,
th
e
te
rm
ca
sh
co
n
ve
rs
io
n
cy
cl
e,
an
d
th
e
ob
se
rv
at
io
n
th
at

th
es
e
fo
u
r
ac
co
u
n
ts
“a
rt
ic
u
la
te
”
w
it
h
on
e
an
ot
h
er
.

T
h
e
eq
u
at
io
n
d
es
cr
ib
es
a
fi
rm
th
at
bu
ys
an
d
se
ll
s
on
ac
co
u
n
t.
A
ls
o,

th
e
eq
u
at
io
n
is
w
ri
tt
en
to
ac
co
m
m
od
at
e
a
fi
rm
th
at
bu
ys
an
d
se
ll
s

on
ac
co
u
n
t.
F
or
a
ca
sh
-o
n
ly
fi
rm
,t
h
e
eq
u
at
io
n
w

ou
ld

on
ly
n
ee
d
d
at
a

fr
om
sa

le
s

op
er
at
io
n
s
(e
.g
.,
ch
an

ge
s

in
in
ve
n
to
ry
),
be
ca
u
se

d
is
bu
rs
in
g
ca
sh
w
ou
ld
be
d
ir
ec
tl
y
m
ea
su
ra
bl
e
as
p
u
rc
h
as
e
of

in
ve
n
to
ry
,a
n
d
co
ll
ec
ti
n
g
ca
sh
w
ou
ld
be
d
ir
ec
tl
y
m
ea
su
ra
bl
e
as
sa
le

in
ve
n
to
ry
.

88
2

C
as

h
co

nv
er
si
on

cy
cl
e

(C
C
C
)m

ea
su

re
s
ho

w
lo
ng

a
r
m

w
ill
b
e

d
ep

riv
ed

of
ca

sh
if
it

in
cr
ea

se
s
its

in
ve

st
m
en

t
in

re
so

ur
ce

s
in

or
d
er

to
ex

p
an

d
cu

st
om

er
sa

le
s.

Fi
g
ur
e
18

.2
C
as
h
o
w

cy
cl
e

H
ow
ev
er
,f
or
a
fi
rm
th
at
bu
ys
an
d
se
ll
s
on
ac
co
u
n
t,
In
cr
ea
se
s
an
d

ec
re
as

es
in
in
ve
n
to
ry
d
o
n
ot
oc
ca
si
on
ca
sh
fl
ow
s
bu
t
ac
co
u
n
ti
n
g

ve
h
ic
le
s
(r
ec

ei
va

bl
es
an
d
p
ay
ab
le
s,
re
sp
ec
ti
ve
ly
);
in
cr
ea
se
s
an
d

d
ec
re
as
es
in
ca
sh
w
il
lr
em
ov
e
th
es
e
ac
co
u
n
ti
n
g
ve
h
ic
le
s
(r
ec
ei
va
bl
es

an
d
p
ay
ab
le
s,
re
sp
ec
ti
ve
ly
)
fr
om

th
e
bo
ok
s.

So
u
rc
e:
ht
tp
s:
//
w
w
w
.b
ou
n
d
le
ss
.c
om
/f
in
a
n
ce
/w
or
ki
n
g
-c
a
p
it
a
l-

m
a
n
a
g
em
en
t/
th
e-
im
p
or
ta
n
ce
-o
f-
ca
sh
/d
ef
in
in
g
-t
he
-c
a
sh
-f
lo
w
-c
yc
le
/

C
C
-B
Y
-S
A

B
ou
n
d
le
ss
is
a
n
op
en
ly
li
ce
n
se
d
ed
u
ca
ti
on
a
lr
es
ou
rc
e

C
al
cu

la
tin

g
th
e
C
as

h
Fl
ow

C
yc

le
C
as

h
o

w
cy

cl
e
=
#
d
ay

s
b
et
w
ee

n
d
is
b
ur
si
ng

ca
sh

an
d

co
lle
ct

in
g
ca

sh
in

co
nn

ec
tio

w
ith

un
d
er
ta
ki
ng

a
d
is
cr
et
e
un

it
of

op
er
at
io
ns

K
E
Y
P
O
IN
TS

•
C
as
h
fl
ow
cy
cl
e
=

In
ve
n
to
ry

co
n
ve
rs
io
n
p
er
io
d
+

R
ec

ei
va
bl
es

co
n
ve
rs
io
n
p
er
io
d
–

P
ay
ab
le
s
co
n
ve
rs
io
n
p
er
io
d

•
In
ve
n
to
ry
co
n
ve
rs
io
n
p
er
io
d
=
A
vg
.I
n
ve
n
to
ry
/
(C
O
G
S
/

36
5)

;R
ec
ei
va
bl

es
co

n
ve
rs
io
n
p
er
io
d
=
A
vg
.

A
cc

ou
n
ts

R
ec
ei
va
bl
e
/
(C
re
d
it

Sa
le
s
/
36
5)

;P
ay
ab
le
s
co
n
ve
rs
io
n
p
er
io
d

=
A
vg
.A
cc
ou
n
ts
P
ay
a

b
le
/

(P
u
rc
h
as
es
/
36
5)
.

•
T
h
er
e
ar
e
fi
ve
im
p
or
ta
n
t
in
te
rv
al
s,
re
fe
rr
ed
to
as
co
n
ve
rs
io
n

cy
cl
es
(o
r
co
n
ve
rs
io
n
p
er
io
d
s)
.

•
O
u
r
ai
m
of
st
u
d
yi
n
g
ca
sh
co
n
ve
rs
io
n
cy

cl
e
an

d
it
s
ca
lc
u
la
ti
on

is
to
ch
an
ge
th
e
p
ol
ic
ie
s
re
la
ti
n
g
to

cr
ed

it
p
u
rc
h
as
e
an
d
cr
ed
it

sa
le
s.

C
a
sh
F
lo
w
C
yc
le

T
h
e
ca
sh
fl
ow
cy
cl
e
is
al
so
ca
ll
ed
ca
sh
co
n
ve
rs
io
n
cy
cl
e
(C
C
C
).

88
3

C
C
C
=
#
d
ay
s
be
tw
ee
n
d
is
bu
rs
in
g
ca
sh
an
d
co
ll
ec
ti
n
g
ca
sh
in

co
n
n
ec
ti
on
w
it
h
u
n
d
er
ta
ki
n
g
a
d
is
cr
et
e
u
n
it
of
op
er
at
io
n
s
(F
ig
u
re

18
.3
).

=
In
ve
n
to
ry
co
n
ve
rs
io
n
p
er
io
d
+
R
ec
ei
va
bl
es
co
n
ve
rs
io
n
p
er
io
d
–

P
ay
ab
le
s
co
n
ve
rs
io
n
p
er
io
d

In
ve
n
to
ry
co
n
ve
rs
io
n
p
er
io
d
=
A
vg
.I
n
ve
n
to
ry
/
(C
O
G
S
/
36
5)

R
ec
ei
va
bl
es
co
n
ve
rs
io
n
p
er
io
d
=
A
vg
.A
cc
ou
n
ts
R
ec
ei
va
bl
e
/
(C
re
d
it

Sa
le
s
/
36
5)

P
ay
ab
le
s
co
n
ve
rs
io
n
p
er
io
d
=
A
vg
.A
cc
ou
n
ts
P
ay
ab
le
/
(P
u
rc
h
as
es
/

36
5)

T
h
er
e
ar
e
fi
ve
im
p
or
ta
n
t
in
te
rv
al
s,
re
fe
rr
ed
to
as
co
n
ve
rs
io
n
cy
cl
es

(o
r
co
n
ve
rs
io
n
p
er
io
d
s)
:

•
T
h
e
C
as
h
C
on
ve
rs
io
n
C
yc
le
em
er
ge
s
as
in
te
rv
al
C
→
D
(i
.e
.,

d
is
bu
rs
in
g
ca
sh
→
co
ll
ec
ti
n
g
ca
sh
).

•
T
h
e
p
ay
ab
le
s
co
n
ve
rs
io
n
p
er
io
d
(o
r
“D
ay
s
p
ay
ab
le
s

ou
ts
ta
n
d
in
g”
)
em
er
ge
s
as
in
te
rv
al
A
→
C
(i
.e
.,
ow
in
g

ca
sh
→
d
is
bu
rs
in
g
ca
sh
)

•
T
h
e
op
er
at
in
g
cy
cl
e
em
er
ge
s
as
in
te
rv
al
A
→
D
(i
.e
.,
ow
in
g

ca
sh
→
co
ll
ec
ti
n
g
ca
sh
)

•
T
h
e
in
ve
n
to
ry
co
n
ve
rs
io
n
p
er
io
d
or
“D
ay
s
in
ve
n
to
ry

ou
ts
ta
n
d
in
g”
em
er
ge
s
as
in
te
rv
al
A
→
B
(i
.e
.,
ow
in
g

ca
sh
→
be
in
g
ow
ed
ca
sh
)

•
T
h
e
re
ce
iv
ab
le
s
co
n
ve
rs
io
n
p
er
io
d
(o
r
“D
ay
s
sa
le
s

ou
ts
ta
n
d
in
g”
)
em
er
ge
s
as
in
te
rv
al
B
→
D
(i
.e
.,
be
in
g
ow
ed

ca
sh
→
co
ll
ec
ti
n
g
ca
sh
)

K
n
ow
le
d
ge
of
an
y
th
re
e
of
th
es
e
co
n
ve
rs
io
n
cy
cl
es
p
er
m
it
s

d
er
iv
at
io
n
of
th
e
fo
u
rt
h
(l
ea
vi
n
g
as
id
e
th
e
op
er
at
in
g
cy
cl
e,
w
h
ic
h
is

ju
st
th
e
su
m
of
th
e
in
ve
n
to
ry
co
n
ve
rs
io
n
p
er
io
d
an
d
th
e
re
ce
iv
ab
le
s

co
n
ve
rs
io
n
p
er
io
d
.)

H
en
ce
,i
n
te
rv
al
{C

→
D
}=

in
te
rv
al
{A

→
B
}+
in
te
rv
al
{B

→
D
}–

in
te
rv
al
{A

→
C
}

88
4

C
as

h
cy

cl
e
m
ea

su
re
s
ho

w
lo
ng

a
r
m

w
ill
b
e

d
ep

riv
ed

of
ca

sh
if
it

in
cr
ea

se
s
its

in
ve

st
m
en

t
in

re
so

ur
ce

s
in

or
d
er

to
ex

p
an

d
cu

st
om

er
sa

le
s

Fi
g
ur
e
18

.3
C
as
h
cy
cl
e

In
ca

lc
u
la
ti
n
g
ea
ch
of
th
es
e
th
re
e
co
n
st
it
u
en
t
co
n
ve
rs
io
n
cy
cl
es
,w
e

u
se
th
e
eq
u
at
io
n
T
IM
E
=
L
E
V
E
L
/R
A
T
E
(s
in
ce
ea
ch
in
te
rv
al
ro
u
gh
ly

eq
u
al
s
th
e
T
IM
E
n
ee
d
ed
fo
r
it
s
L
E
V
E
L
to
be
ac
h
ie
ve
d
at
it
s

co
rr
es
p
on

d
in
g

R
A
T
E
).

W
e
es
ti
m
at
e
it
s
L
E
V
E
L
“d
u
ri
n
g
th
e
p
er
io
d
in
qu
es
ti
on
”
as
th
e

er
ag

e
of
it
s

le
ve

ls
in
th
e
tw
o
ba
la
n
ce
sh
ee
ts
th
at
su
rr
ou
n
d
th
e

p
er
io
d
🙁
L
t1
+
L
t2
)/
2.

T
o
es
ti
m
at
e
it
s
R
A
T
E
,w
e
n
ot
e
th
at
A
cc
ou
n
ts
R
ec
ei
va
bl
e
gr
ow
s
on
ly

w
h
en

re
ve

n
u
e
is
ac
cr
u
ed
;a
n
d
In
ve
n
to
ry
sh
ri
n
ks
an
d
A
cc
ou
n
ts

P
ay
ab
le
gr
ow
s
by
an
am
ou
n
t
eq
u
al
to
th
e
C
O
G
S
ex
p
en
se
(i
n
th
e
lo
n
g

ru
n
,s
in
ce
C
O
G
S
ac
tu
al
ly
ac
cr
u
es
so
m
et
im
e
af
te
r
th
e
in
ve
n
to
ry

d
el
iv
er
y,
w
h
en
th
e
cu
st
om
er
s
ac
qu
ir
e
it
).

•
In
ve
n
to
ry
co
n
ve
rs
io
n
p
er
io
d
:R
at
e
=
C
O
G
S,
si
n
ce
th
is
is
th
e

it
em
th
at
(e
ve
n
tu
al
ly
)
sh
ri
n
ks
in
ve
n
to
ry
.

•
R
ec
ei
va
bl
es
co
n
ve
rs
io
n
p
er
io
d
:R
at
e
=
re
ve
n
u
e,
si
n
ce
th
is
is

th
e
it
em
th
at
ca
n
gr
ow
re
ce
iv
ab
le
s
(s
al
es
).

•
P
ay
ab
le
s
co
n
ve
rs
io
n
p
er
io
d
:R
at
e
=
[i
n
ve
n
to
ry
in
cr
ea
se
+

C
O
G
S]
,s
in
ce
th
es
e
ar
e
th
e
it
e

m
s

fo
r
th
e
p
er
io
d
th
at
ca
n

in
cr
ea
se
“t
ra
d
e
ac
co
u
n
ts
p
ay
ab
le
s”
(i
.e
.,
th
e
on
es
th
at
gr
ew
it
s

in
ve
n
to
ry
).

A
im
s
o
f
C
C
C

O
u
r
ai
m
of
st
u
d
yi
n
g
ca
sh
co
n
ve
rs
io
n
cy
cl
e
an
d
it
s
ca
lc
u
la
ti
on
is
to

ch
an
ge
th
e
p
ol
ic
ie
s
re
la
ti
n
g
to
cr
ed
it
p
u
rc
h
as
e
an
d
cr
ed
it
sa
le
s.
W
e

ca
n
ch
an
ge
ou
r
st
an
d
ar
d
of
p
ay
m
en
t
of
cr
ed
it
p
u
rc
h
as
e
or
ge
tt
in
g

ca
sh
fr
om
ou
r
d
eb
to
rs
on
th
e
ba
si
s
of
re
p
or
ts
of
ca
sh
co
n
ve
rs
io
n

cy
cl
e.
If
it
te
ll
s
go
od
ca
sh
li
qu
id
it
y
p
os
it
io
n
,w
e
ca
n
m
ai
n
ta
in
ou
r

p
as
t
cr
ed
it
p
ol
ic
ie
s.
It
s
ai
m
is
al
so
to
st
u
d
y
ca
sh
fl
ow
of
bu
si
n
es
s.

C
as
h
fl
ow
st
at
em
en
t
an
d
ca
sh
co
n
ve
rs
io
n
cy
cl
e
st
u
d
y
w
il
lb
e
h
el
p
fu
l

fo
r
ca
sh
fl
ow

an
al
ys

is
.

So
u
rc
e:
ht
tp
s:
//
w
w
w
.b
ou
n
d
le
ss
.c
om
/f
in
a
n
ce
/w
or
ki
n
g
-c
a
p
it
a
l-

m
a
n
a
g
em
en
t/
th
e-
im
p
or
ta
n
ce
-o
f-
ca
sh
/c
a
lc
u
la
ti
n
g
-t
he
-c
a
sh
-f
lo
w
-c
yc
le
/

C
C
-B
Y
-S
A

B
ou
n
d
le
ss
is
a
n
op
en
ly
li
ce
n
se
d
ed
u
ca
ti
on
a
lr
es
ou
rc
e

88
5

Th
e
C
as

h
B
ud

ge
t

C
om

p
on

en
ts

Th
e
ca

h
b
ud

ge
t

in
cl
ud

es
th
e
b
eg

in
ni
ng

b
al
an

ce
,d

et
ai
l

on
p
ay

m
en

ts
an

d
re
ce

ip
ts
,a

nd
an

en
d
in
g
b
al
an

ce
.

K
E
Y
P
O
IN
TS

•
T
h
e
ca
sh
fl
ow
bu
d
ge
t
h
el
p
s
th
e
bu
si
n
es
s
d
et
er
m
in
e
w
h
en
it
s

in
co
m
e
w
il
lb
e
su
ff
ic
ie
n
t
to
co
ve
r
it
s
ex
p
en
se
s
an
d
w
h
en
th
e

m
p
an

y
w
il
ln
ee
d
to
se
ek
ou
ts
id
e
fi
n
an
ci
n

•
C
om
p
on
en
ts
–
m
aj
or

cl
as

se
s
in

cl
u
d
e
ca
sh
re
ce
ip
ts
an
d

p
ay
m
en
ts
.

•
C
as
h
re
ce
ip
ts
in
cl
u
d
e
ca
sh
ge
n
er
at
ed
fr
om
op
er
at
io
n
s,
ca
sh

re
ce
ip
ts
fr
om
cu
st
om
er
s,
p
ro
ce
ed
s
fr
om
th
e
sa

le
of

eq
u

ip
m
en

t,
d
iv
id
en
d
s
re
ce
iv
ed
,a
n
d
ot
h
er
in
co
m
e.

•
C
as

h
p
ay

m
en
ts
in
cl
u
d
e
ca
sh
p
ai
d

to
su

p
p
li
er
s,
ca
sh
p
ai
d
to

em
p
lo
ye
es
,p
u
rc
h
as
e
of
as
se
ts
,p
ay
m
en
ts
re
la
te
d
to
m
er

ge
rs

an
d
ac
qu
is
it
io
n
s,
in
te
re
st
p
ai
d
,i
n
co
m
e
ta
xe
s
p
ai
d
,d
iv
id
en
d
s

p
ai
d
,a
n
d
ot
h
er
p
ay
m
en
ts
.

C
a
sh
B
u
d
g
e
t

A
ca
sh
b
u
d
g
e
t
is
a
p
re
d
ic
ti
on
of
fu
tu
re
ca
sh
re
ce
ip
ts
an
d

ex
p
en
d
it
u
re
s
fo
r
a
p
ar
ti
cu
la
r
ti
m
e
p
er
io
d
,u
su
al
ly
in
th
e
n
ea
r
fu
tu
re
.

T
h
e
ca
sh
fl
ow
bu
d
ge
t
h
el
p
s
th
e
bu
si
n
es
s
d
et
er
m
in
e
w
h
en
it
s
in
co
m
e

w
il
lb
e
su
ff
ic
ie
n
t
to
co
ve
r
it
s
ex
p
en
se
s
an
d
w
h
en
th
e
co
m
p
an
y
w
il
l

n
ee
d
to
se
ek
ou
ts
id
e
fi
n
an
ci
n
g
(F
ig
u
re
18
.4
).

M
aj
or
cl
as
se
s
in
cl
u
d
e
ca
sh
re
ce
ip
ts
an
d
p
ay
m
en
ts
.

88
6

C
as

h
b
ud

ge
t
p
la
ys

an
im

p
or
ta
nt

ro
le

in
a

co
m
p
an

y’
s
liq

ui
d
ity

n
an

ci
ng

p
la
nn

in
g.

Fi
g
ur
e
18

.4
C
as
h
B
ud
ge
t

C
a
sh
R
e
ce
ip
ts

1.
C
as
h
ge
n
er
at
ed
fr
om
op
er
at
io
n
s

2.
C
as
h
re
ce
ip
ts
fr
om
cu
st
om
er
s
–
C
ol
le
ct
in
g
th
e
ac
co
u
n
ts

re
ce
iv
ab
le
.A
cc
ou
n
ts
re
ce
iv
ab
le
,a
ls
o
kn
ow
n
as
D
eb
to
rs
,i
s

m
on

ey
ow

ed
to
a
bu
si
n
es
s
by
it
s
cl
ie
n
ts
(c
u
st
om
er
s)
an
d

sh
ow
n
on
th
e
bu
si
n
es
s’
s
ba
la
n
ce
sh
ee
t
as
an
as
se
t.
It
is
on
e
of

a
se
ri
es
of
ac
co
u
n
ti
n
g
tr
an
sa
ct
io
n
s

d
ea

li
n
g
w
it

h
th
e

bi
ll
in
g
of

a
cu
st
om
er
fo
r
go
od
s
an
d

se
rv
ic
es

th
at
th
e
cu
st
om
er
h
as

or
d
er

ed
.

3.
P
ro
ce
ed
s
fr
om
th
e
sa
le
of
eq
u
ip
m
en
t

4.
D
iv
id
en
d
s
re
ce
iv
ed
😀
iv
id
en
d
s
ar
e
p
ay
m
en
ts

m
ad

e
by
a

co
rp
or
at
io
n
to
it
s
sh
ar
eh
ol
d
er
m
em
be
rs
.I
t
is
th
e
p
or
ti
on
of

co
rp
or
at
e
p
ro
fi
ts
p
ai
d
ou
t
to

st
oc

kh
ol
d

er
s.

W
h
en
a

co
rp
or
at
io
n

ea
rn

s
a
p
ro
fi
t
or
su
rp
lu
s,
th
at
m
on
ey
ca
n
be
p
u
t

to
tw
o
u
se
s:
it
ca
n
ei
th
er
be
re
-i
n
ve
st
ed
in
th
e
bu
si
n
es
s

(c
al
le
d
re
ta
in
ed
ea
rn
in
gs
),
or
it
ca
n
be
d
is
tr
ib
u
te
d
to

sh
ar
eh
ol
d
er
s.

5.
O
th
er
in
co
m
e:
O
th
er
in
ve
st
m
en
t
or
ot
h
er
in
te
re
st
in
co
m
e,

et
c.

C
a
sh
P
a
ym
e
n
ts

1.
C
as
h
p
ai
d
to
su
p
p
li
er
s

2.
C
as
h
p
ai
d
to
em
p
lo
ye
es
–
Sa
la
ry
,w

ag
es

ex
p
en
se
s.

3.
P
u
rc
h
as
e
of
as
se
t
–
E
qu
ip
m
en
t,
m
ac
h
in
e,
re
al
es
ta
te
,e
tc
.

4.
P
ay
m
en
ts
re
la
te
d
to
m
er
ge
rs
an
d
ac
qu
is
it
io
n
s

5.
In
te
re
st
p
ai
d
–
In
te
re
st
of
sh
or
t-
te
rm
or
lo
n
g-
te
rm
d
eb
t.

6.
In
co
m
e
ta
xe
s
p
ai
d

7.
D
iv
id
en
d
s
p
ai
d
–
P
ay
in
g
d
iv
id
en
d
s
to
sh
ar
eh
ol
d
er
s
or

in
ve
st
or
s.

8
.
D
eb
t
p
ai
d
–
Sh
or
t
te
rm
or
lo
n
g
te
rm
d
eb
t
p
ri
n
ci

p
le

9.
O
th
er
p
ay
m
en
t
–
W
h
ic
h
in
cl
u
d
es
A
d
ve
rt
is
in
g,
Se
ll
in
g

ex
p
en
se
s,
A
d
m
in
is
tr
at
iv
e
ex
p
en
se
,I
n
su
ra
n
ce
ex
p
en
se
s,
R
en
t

ex
p
en
se
s,
et
c.

N
et
in
cr
ea
se
in
ca
sh
an
d
ca
sh
eq
u
iv
al
en
ts

C
as
h
ba
la
n
ce
,e
n
d
of
ye
ar

So
u
rc
e:
ht
tp
s:
//
w
w
w
.b
ou
n
d
le
ss
.c
om
/f
in
a
n
ce
/w
or
ki
n
g
-c
a
p
it
a
l-

m
a
n
a
g
em
en
t/
th
e-
im
p
or
ta
n
ce
-o
f-
ca
sh
/t
he
-c
a
sh
-b
u
d
g
et
-c
om
p
on
en
ts
/

C
C
-B
Y
-S
A

B
ou
n
d
le
ss
is
a
n
op
en
ly
li
ce
n
se
d
ed
u
ca
ti
on
a
lr
es
ou
rc
e

88
7

M
an

ag
in
g
Fl
oa

M
an

ag
in
g
C
ol
le
ct
io
ns

M
an

ag
in
g
D
is
b
ur
se

m
en

Se
ct
io
n
2

C
as

h
M
an

ag
em

en
t

88
8

ht
tp
s:
//
w
w
w
.b
ou

nd
le
ss
.c
om

/
na

nc
e/
w
or
ki
ng

-c
ap

ita
l-
m
an

ag
em

en
t/
ca

sh
-m

an
ag

em
en

M
an

ag
in
g
Fl
oa

t
Fl
oa

t
is

th
e
te
rm

us
ed

to
re
p
re
se

nt
d
up

lic
at
e
m
on

ey
p
re
se

nt
b
et
w
ee

n
th
e
tim

e
a
d
ep

os
it
is

m
ad

e
an

d
w
he

n
th
e
d
ep

os
it
cl
ea

rs
th
e

b
an

K
E
Y
P
O
IN
TS

•
F
lo
at
is
m
os
t
ap
p
ar
en
t
in
th
e
ti
m
e
d
el
ay
be
tw
ee
n
a
ch
ec
k

be
in
g
w
ri
tt
en
an
d
th
e
fu
n
d
s
to
co
ve
r
th
at
ch
ec
k
be
in
g

d
ed
u
ct
ed
fr
om
th
e
p
ay
er
‘s
ac
co
u
n
t.

•
B
an
k
fl
oa
t
is
th
e
ti
m
e
it
ta
ke
s
to
cl
ea
r
th
e
fu
n
d
s,
fr
om
th
e

ti
m
e
th
ey
w
er
e
d
ep
os
it
ed
to
th
e
ti
m
e
th
ey
w
er

e
cr
ed

it
ed
to
th
e

d
ep

os
it
in

g
ba
n
k.
C
u
st
om
er
fl
oa
t
is
d
ef
in
ed
as
th
e
sp
an
of
ti
m
e

be
tw
ee
n
th
e
d
ep
os
it
to
th
e
ti
m
e
th
e
fu
n
d
s
ar
e
re
le
as
ed
fo
r
u
se

by
th
e
d
ep
os
it
or
.

•
W
h
en
m
an
ag
in
g
ca
sh
d
is
bu
rs
em
en
ts
,

a
co

m
p
an
y

sh
ou

en
d
ea
vo
r

to
in
cr
ea

e
th
e
am

ou
n
t
of
ti
m
e
p
re
se
n
t
in
th
e

d
is
bu
rs
em
en

t
cy

cl
e.

M
a
n
a
g
in
g
F
lo
a
t

T
h
e
te
rm
fl
oa
t
is
u
se
d
in
fi
n
an
ce
an
d
ec
on
om
ic
s
to
re
p
re
se
n
t

d
u
p
li
ca
te
m
on
ey
p
re
se
n
t
in
th
e
ba
n
ki
n

g
sy

st
em

d
u
ri
n
g
th
e
ti
m
e

be
tw
ee
n
w
h
en
a
d
ep
os
it
is
m
ad
e
in
th
e
re
ci
p
ie
n
t’s
ac
co
u
n
t
an
d
w
h
en

th
e
m
on
ey
is
d
ed
u
ct
ed
fr
om
th
e
se
n
d
er
‘s
ac
co
u
n
t.
F
lo
at
is
al
so

as
so
ci
at
ed
w
it
h
th
e
am
ou
n
t
of
cu
rr
en
cy
av
ai
la
bl
e
to

tr
ad

e
–
i.e
.,

co
u
n
tr
ie
s
ca
n
m
an
ip
u
la
te
th
e
w
or
th
of
th
ei
r
cu
rr
en
cy
by
re
st
ri
ct
in
g

or
ex
p
an
d
in
g
th
e
am
ou
n
t
of
fl
oa
t
av
ai
la
bl
e
to
tr
ad
e.
F
lo
at
is
m
os
t

ap
p
ar
en
t
in
th
e
ti
m
e
d
el
ay
be
tw
ee
n
a
ch
ec
k
be
in
g
w
ri
tt
en
an
d
th
e

fu
n
d
s
to
co
ve
r
th
at
ch
ec
k
be
in
g
d
ed
u
ct
ed
fr
om
th
e
p
ay
er
‘s
ac
co
u
n
t.

O
n
ce
th
e
re
ci
p
ie
n
t,
or
p
ay
ee
,d
ep
os
it
s
th
e
ch
ec
k
in
th
e

co
rr
es
p
on
d
in
g
ac
co
u
n
t,
th
e
ba
n
k
im
m
ed
ia
te
ly
cr
ed
it
s
(i
n
cr
ea
se
s)

th
e
p
ay
ee
‘s
ac
co
u
n
t,
as
su
m
in
g
th
at
th
e
p
ay
er
‘s
ba
n
k
w
il
lu
lt
im
at
el
y

se
n
d
th
e
fu
n
d
s
to
co
ve
r
th
e
ch
ec
k.
U
n
ti
lt
h
e
p
ay
er
‘s
ba
n
k
ac
tu
al
ly

se
n
d
s
th
e
fu
n
d
s,
bo
th
th
e
p
ay
er
an
d
th
e
p
ay
ee
h
av
e
th
e
sa
m
e
m
on
ey

in
th
ei
r
ac
co
u
n
ts
.O
n
ce
th
e
p
ay
ee
‘s
ba
n
k
n
ot
if
ie
s
th
e
p
ay
er
‘s
ba
n
k
of

a
p
en
d
in
g
ch
ec
k,
th
e
d
u
p
li
ca
te
fu
n
d
s
w
il
lb
e
re
m
ov
ed
fr
om
th
e

p
ay
er
‘s
ac
co
u
n
t
an
d
th
e
ch
ec
ks
w
il
lb
e
co
n
si
d
er
ed
to
h
av
e
cl
ea
re
d

th
e
ba
n
k.
In
ch
ec
k
cl
ea
ri
n
g,
ba
n
k
fl
oa
t
an
d
cu
st
om
er
fl
oa
t
ar
e

p
re
se
n
t.

B
an
k
fl
oa
t
is
th
e
ti
m
e
it
ta
ke
s
to
cl
ea
r
th
e
fu
n
d
s,
fr
om
th
e
ti
m
e
th
ey

w
er
e
d
ep
os
it
ed
to
th
e
ti
m
e
th
ey
w
er
e
cr
ed
it
ed
to
th
e
d
ep
os
it
in
g

ba
n
k.
C
u
st
om
er
fl
oa
t
is
d
ef
in
ed
as
th
e
sp
an
of
ti
m
e
be
tw
ee
n
th
e

d
ep
os
it
to
th
e
ti
m
e
th
e
fu
n
d
s
ar
e
re
le
as
ed
fo
r
u
se
by
th
e
d
ep
os
it
or
.

T
h
e
d
if
fe
re
n
ce
be
tw
ee
n
th
e
ba
n
k
fl
oa
t
an
d
th
e
cu
st
om
er
fl
oa
t
is

ca
ll
ed
n
eg
at
iv
e
fl
oa
t.
N
eg
at
iv
e
fl
oa
t
is
u
se
d
by
th
e
ba
n
k
as
th
e

ov
er
n
ig
h
t
in
ve
st
ab
le
fu
n
d
s.
F
lo
at
ca
n
ca
u
se
m
ar
gi
n
al
ch
an
ge
s
in
th
e

m
on
ey
su
p
p
ly
.B
ef
or
e
el
ec

tr
on

ic
ch
ec
k
cl
ea
ri
n
g,
ba
d
w
ea
th
er
or

co
m
m
u
n
ic
at
io
n
p
ro
bl
em
s
of
te
n
ca
u
se
d
fl
oa
t
to
si
gn
if
ic
an
tl
y

88
9

in
cr
ea
se
,a
s
th
e
cl
ea
ri
n
g
of
ch
ec
ks
w
as
d
el
ay
ed
.A
n
ot
h
er
as
p
ec
t
of

fl
oa
t
ti
m
e
is
it
s
u
se
to
d
ef
ra
u
d
,c
om
m
on
ly
kn
ow
n
as
ch
e
ck
k
it
in
g
.

F
lo
a
t
In
R
e
la
ti
o
n
T
o
C
a
sh
M
a
n
a
g
e
m
e
n
t

(F
ig
u
re
18
.5
)
W
h
en
m
an
ag
in
g
ca
sh
d
is
bu
rs
em
en
ts
,a
co
m
p
an
y

sh
ou
ld
en
d
ea
vo
r
to
in
cr
ea
se
th
e
am
ou
n
t
of
ti
m
e
p
re
se
n
t
in
th
e

d
is
bu
rs
em
en
t
cy
cl
e.
In
ot
h
er
w
or
d
s,
it
is
ap
p
ro
p
ri
at
e
to
d
el
ay

m
ak

in
g
p
ay
m
en
ts
u
n
ti
lt
h
ey
co
m
e
d
u
e
in
or
d
er
to
h
av
e
u
se
of

av
ai
la
bl
e
ca
sh
fo
r
as
lo
n
g

as
p
os

si
bl
e.
So
m
e
m
et
h
od
s
fo
r

ac
co
m
p
li
sh
in
g
th
is
in
cl
u
d
e
m
ai
li
n
g
ch
ec
ks
fa
r
aw
ay
fr
om
th
os
e

w
ai
ti
n
g
to
re
ce
iv
e
p
ay
m
en
t,
d
is
bu
rs
in
g
ch
ec
ks
fr
om
a
re
m
ot
e
ba
n
k,

or
p
u
rc
h
as
in
g
w
it
h
cr
ed
it
ca
rd
s.
M
et
h
od
s
su
ch
as
th
es
e
p
re
se
n
t
a

co
m
p
an
y
w
it
h
th
re
e
ty
p
es
of
fl
oa
t
to
ta
ke
ad
va
n
ta
ge
of
:

1.
M
ai
lF
lo
at
:T
im
e
sp
en
t
in
th
e
m
ai
l.

2.
C
le
ar
an
ce
F
lo
at
:T
im
e
sp
en
t
tr
yi
n
g
to
cl
ea
r
th
e
ba
n
k.

3.
P
ro
ce
ss
in
g
F
lo
at
:T
im
e
re
qu
ir
ed
to

p
ro
ce
ss

ca
sh
fl
ow

tr
an
sa
ct
io
n
s.

So
u
rc
e:
ht
tp
s:
//
w
w
w
.b
ou
n
d
le
ss
.c
om
/f
in
a
n
ce
/w
or
ki
n
g
-c
a
p
it
a
l-

m
a
n
a
g
em
en
t/
ca
sh
-m
a
n
a
g
em
en
t/
m
a
n
a
g
in
g
-f
lo
a
t/

C
C
-B
Y
-S
A

B
ou
n
d
le
ss
is
a
n
op
en
ly
li
ce
n
se
d
ed
u
ca
ti
on
a
lr
es
ou
rc
e

89
0

In
ca

sh
m
an

ag
em

en
t,
o

at
ca

n
b
e
ut
ili
ze

d
to

m
ak

e
us

e
of

ca
sh

on
ha

nd
fo
r
as

lo
ng

as
p
os

si
b
le
.

Fi
g
ur
e
18

.5
Fl
oa

tin
g

C
as
h

M
an

ag
in
g
C
ol
le
ct
io
ns

A
co

m
p
an

y
m
us

t
b
al
an

ce
its

ne
ed

fo
r

q
ui
ck

ca
sh

co
lle
ct
io
ns

w
ith

th
e
ne

ed
s
an

d
d
es

ire
s
of

its
cu

st
om

er
s.

K
E
Y
P
O
IN
TS

•
Sp
ec
if
ic
co
ll
ec
ti
on
te
ch
n
iq
u
es
in
cl
u
d
e
le
tt
er
s,
te
le
p
h
on
e
ca
ll
s,

fa
xe
s,
em
ai
ls
,a
n
d
le
ga
la
ct
io
n
.

•
W
h
er
ev
er
p
os
si
bl
e,
a
co
m
p
an
y
sh
ou
ld
tr
y
to
co
ll
ec
t
p
ay
m
en
t

im
m
ed
ia
te
ly
as
p
ro
d
u
ct
s
or
se
rv
ic
es
ar
e
d
el
iv
er
ed
.

•
A
co
m
p
an
y
m
ay
se
t
u
p
a
lo
ck
bo
x
se
rv
ic
e
w
it
h
th
ei
r
ba
n
k
fo
r

re
ce
iv
in
g
cu
st
om
er
s’
p
ay
m
en
ts
.

M
a
n
a
g
in
g
C
a
sh
C
o
ll
e
ct
io
n
s

T
h
e
ca
sh
re
ce
ip
ts
cy
cl
e
re
qu
ir
es
a
d
il
ig
en
t
co
ll
ec
ti
on
p
ro
ce
ss
.A

co
m
p
an
y
m
u
st
ba
la
n
ce
th
is
n
ee
d
fo
r
qu
ic
k
ca
sh
co
ll
ec
ti
on
s
w
it
h
th
e

n
ee
d
s
an
d
d
es
ir
es
of
it
s
cu
st
om
er
s.
F
or
ex
a

m
p
le

,c
u
st
om
er
s
w
h
o
ar
e

im
p
or
ta
n
t
to
a
fi
rm
‘s
bu
si
n
es
s
sh
ou
ld
be
tr
ea
te
d
ca
re
fu
ll
y
as

op
p
os
ed
to
cu
st
om
er
s
w
h
o
m
ea
n
li
tt
le
or
n
ot
h
in
g
to
it
s
fu
tu
re
.

T
h
er
ef
or
e,
co
ll
ec
ti
on
ef
fo
rt
s
m
u
st
be
cu
st
om
er
sp
ec
if
ic
in
or
d
er
to

be
ef
fe
ct
iv
e.
Sp
ec
if
ic
co
ll
ec
ti
on
te
ch
n
iq
u
es
in
cl
u
d
e
le
tt
er
s,
te
le
p
h
on
e

ca
ll
s,
fa
xe
s,
em
ai
ls
,a
n
d
le
ga
la
ct
io
n
.A
n

ex
am

p
le
of
a
co
ll
ec
ti
on

le
tt
er
fo
ll
ow
s:

O
u
r
re
co
rd
s
in
d
ic
at
e
th
at
a
ba
la
n
ce
of
$
4,
65
0
.3
0
is
ov
er
90
d
ay
s

p
as
t
d
u
e.
W
e
h
av
e
se
n
t
m
on
th
ly
st
at
em
en
ts
an
d
re
m
in
d
er
s
se
ve
ra
l

ti
m
es
,b
u
t
w
e
h
av
e
ye
t
to
re
ce
iv
e
p
ay
m
en
t
or
an
y
ex
p
la
n
at
io
n
as
to

w
h
y
p
ay
m
en
t
sh
ou
ld
n
ot
be
m
ad
e.
P
le
as
e
re
vi
ew
th
is
m
at
te
r

im
m
ed
ia
te
ly
.I
w
il
lc
al
ly
ou
in
th
e
n
ex
t
fi
ve
d
ay
s
to
ar
ra
n
ge
p
ay
m
en
t.

T
h
e
ov
er
al
lc
ol
le
ct
io
n
p
ro
ce
ss
sh
ou
ld
be
p
ro
-a
ct
iv
e
an
d
p
re
ve
n
ti
ve
.

F
or
ex
am
p
le
,w
h
er
ev
er
p
os
si
bl
e
a
co
m
p
an
y
sh
ou
ld
tr
y
to
co
ll
ec
t

p
ay
m
en
t
im
m
ed
ia
te
ly
as
p
ro
d
u
ct
s
or
se
rv
ic
es
ar
e
d
el
iv
er
ed
,i
.e
.,

re
ce
iv
e
p
ay
m
en
t
in
ca
sh
.T
h
is
el
im
in
a

t
es

th
e
n
ee
d
fo
r
in
vo
ic
in
g

an
d
fo
ll
ow
u
p
co
ll
ec
ti
on
te
ch
n
iq
u
es
.A
fi
rm
sh
ou
ld
al
w
ay
s
re
qu
ir
e

d
ep
os
it
s
fr
om
cu
st
om
er
s
th
at
h
av
e
a
h
is
to
ry
of
m
ak
in
g
la
te

p
ay
m
en
ts
.I
t
sh
ou
ld
u
se
cr
ed
it
ap
p
li
ca
ti
on
s
to
w
ee
d
ou
t
ba
d

cu
st
om
er
s,
an
d
in
cl
u
d
e
a
cl
au
se
in
th
e
cr
ed
it
ap
p
li
ca
ti
on
th
at
st
at
es

al
lc
ol
le
ct
io
n

co
st

s
ar
e
re
im
bu
rs
ed
by
th
e
cu
st
om
er
on
d
el
in
qu
en
t

ac
co
u
n
ts
(F
ig
u
re
18
.6
).

89
1

A
sa

m
p
le

co
lle
ct
io
n

se
tt
le

m
en

t
le
tt
er
.

Fi
g
ur
e
18

.6
E
xa
m
p
le

C
ol
le
ct
io
n

Le
tt
er

L
o
ck
B
o
x
B
a
n
k
in
g

L
oc
k
bo
x
ba
n
ki
n
g
is
a
se
rv
ic
e
of
fe
re
d
to
co
m
p
an
ie
s
by
co
m
m
er
ci
al

ba
n
ks
th
at
si
m
p
li
fi
es
co
ll
ec
ti
on
an
d
p
ro
ce
ss
in
g
of
ac
co
u
n
t

re
ce
iv
ab
le
s.
In
ge
n
er
al
,a
lo
ck
b
o
x
is
a
P
os
t
O
ff
ic
e
bo
x
th
at
is

ac
ce
ss
ib
le
by
a
ba
n
k.
A
co
m
p
an
y
m
ay
se
t
u
p
a
lo
ck
bo
x
se
rv
ic
e
w
it
h

th
ei
r
ba
n
k
fo
r
re
ce
iv
in
g
cu
st
om
er
s’
p
ay
m
en
ts
.T
h
e
co
m
p
an
y’
s

cu
st
om
er
s
se
n
d
th
ei
r
p
ay
m
en
ts
to
th
e
P
O
bo
x,
an
d
th
e
ba
n
k

su
bs
eq
u
en
tl
y
co
ll
ec
ts
an
d
p
ro
ce
ss
es
th
es
e
p
ay
m
en
ts
d
ir
ec
tl
y
an
d

d
ep
os
it
s
th
em
to
th
e
co
m
p
an
y’
s
ac
co
u
n
t.
B
ec
au
se
th
e
ba
n
k
is

m
ak
in
g
th
e
co
ll
ec
ti
on
,t
h
e
fu
n
d
s
th
at
h
av
e
be
en
re
ce
iv
ed
ar
e

im
m
ed
ia
te
ly
d
ep
os
it
ed
in
to
th
e
co
m
p
an
y’
s
ac
co
u
n
t
w
it
h
ou
t
fi
rs
t

be
in
g
p
ro
ce
ss
ed
by
th
e
co
m
p
an
y’
s
ac
co
u
n
ti
n
g
sy
st
em
,t
h
er
eb
y

sp
ee
d
in
g
u
p
ca
sh
co
ll
ec
ti
on
.A
n
ot
h
er
be
n
ef
it
of
th
e
lo
ck
bo
x
se
rv
ic
e

is
th
at
a
co
m
p
an
y
ca
n
m
ai
n
ta
in
sp
ec
ia
lm
ai
lb
ox
es
in
d
if
fe
re
n
t

lo
ca
ti
on
s
ar
ou
n
d
th
e
co
u
n
tr
y.
A
cu
st
om
er
th
en
se
n
d
s
p
ay
m
en
t
to

th
e
cl
os
es
t
lo
ck
bo
x.

So
u
rc
e:
ht
tp
s:
//
w
w
w
.b
ou
n
d
le
ss
.c
om
/f
in
a
n
ce
/w
or
ki
n
g
-c
a
p
it
a
l-

m
a
n
a
g
em
en
t/
ca
sh
-m
a
n
a
g
em
en
t/
m
a
n
a
g
in
g
-c
ol
le
ct
io
n
s/

C
C
-B
Y
-S
A

B
ou
n
d
le
ss
is
a
n
op
en
ly
li
ce
n
se
d
ed
u
ca
ti
on
a
lr
es
ou
rc
e

M
an

ag
in
g
D
is
b
ur
se

m
en

ts
H
ow

a
co

m
p
an

y
m
an

ag
es

va
rio

us
d
is
b
ur
se

m
en

ts
an

d
cu

rr
en

t
as

se
ts

ca
n
ha

ve
a
si
gn

i
ca

nt
im

p
ac

t
on

its
ca

sh
o

w
s.

K
E
Y
P
O
IN
TS

•
O
n
e
ob
vi
ou
s
tr
en
d
in
p
ay
ro
ll
m
an
ag
em
en
t
is
to
im
p
le
m
en
t
a

fl
ex
ib
le
w
or
k
fo
rc
e
si
n
ce
th
e
fl
ow
of
w
or
k
fl
u
ct
u
at
es
.

•
P
u
rc
h
as
in
g
p
ra
ct
ic
es
,s
u
ch
as
re
n
ti
n
g
as
op
p
os
ed
to
bu
yi
n
g
or

bu
yi
n
g
ou
t
of
se

as
on

,c
an
h
el
p
a
co
m
p
an
y
m
ai
n
ta
in
an
d

ge
n
er
at
e
ca
sh
fl
ow
.

•
In
ve
n
to
ri
es
h
av
e
se
ve
ra
lh
id
d
en
co
st
s
th
at
ca
n
d
ra
in
ca
sh

fl
ow
,i
n
cl
u
d
in
g
st
or
ag
e,
in
su
ra
n
ce
,s
p
oi
la
ge
,h
an
d
li
n
g,
ta
xe
s,

an
d
fi
n
an
ci
n
g.

•
A
co
m
p
an
y
sh
ou
ld
m
ak
e
su
re
it
d
oe
s
n
ot
ov
er
in
su
re
th
e

M
a
n
a
g
in
g
C
a
sh
D
is
b
u
rs
e
m
e
n
ts

(F
ig
u
re
18
.7
)
H
ow
a

co
m
p
an
y
m
an
ag
es

va
ri
ou
s
d
is
bu
rs
em
en
ts

an
d
cu
rr
en
t
as
se
ts
ca
n

h
av
e
a
si
gn
if
ic
an
t

im
p
ac
t
on
it
s
ca
sh

89
2

C
as

h
p
ay

m
en

ts
ar
e

vi
ta
lly

im
p
or
ta
nt

to
m
an

ag
e
in

or
d
er

to
m
ai
nt
ai
n
a
su

cc
es

sf
ul

b
us

in
es

Fi
g
ur
e
18

.7
C
as
h

D
is
b
ur
se
m
en
ts

fl
ow
s.
T
h
er
e
ar
e
se
ve
ra
lp
ro
bl
em
ar
ea
s
to
w
at
ch
ou
t
fo
r,
su
ch
as

p
ay
ro
ll
,p
u
rc
h
as
in
g,
in
ve
n
to
ri
es
,a
n
d
in
su
ra
n
ce
.

P
a
yr
o
ll

P
ay
ro
ll
is
a
h
ef
ty
ca
sh
ou
tf
lo
w
an
d
re
qu
ir
es
sp
ec
ia
la
tt
en
ti
on
.O
n
e

ob
vi
ou
s
tr
en
d
in
p
ay
ro
ll
m
an
ag
em
en
t
is
to
im
p
le
m
en
t
a
fl
ex
ib
le

w
or
k
fo
rc
e,
si
n
ce
th
e
fl
ow
of
w
or
k
fl
u
ct
u
at
es
.O
u
ts
o
u
rc
in
g
an
d

te
m
p
or
ar
y
w
or
ke
rs
ar
e
of
te
n
p
ar
t
of
a
fl
ex
ib
le
w
or
kf
or
ce
.H
ow
ev
er
,

a
co
m
p
an
y
m
u
st
re
ta
in
a
fu
ll
-t
im
e
w
or
kf
or
ce
fo
r
co
re
ac
ti
vi
ti
es
.A

fi
rm
ca
n
al
so
in
cr
ea
se
p
ay
ro
ll
fl
oa
t
ti
m
es
by
si
m
p
ly
d
is
tr
ib
u
ti
n
g

p
ay
ro
ll
ch
ec
ks
af
te
r
th
e
p
oi
n
t
w
h
en
ba
n
ks
w
il
lc
le
ar
ch
ec
ks
.

P
u
rc
h
a
si
n
g

F
le
xi
bl
e
p
u
rc
h
as
in
g
p
ra
ct
ic
es
ca
n
h
el
p
a
co
m
p
an
y
m
ai
n
ta
in
an
d

ge
n
er
at
e
ca
sh
fl
ow
.A
co
m
p
an
y
m
ay
co
n
si
d
er
re
n
ti
n
g
ce
rt
ai
n
it
em
s

as
op
p
os
ed
to
p
u
rc
h
as
in
g.
A
m
an
ag
er
m
ay
as
k,
d
o
w
e
re
al
ly
n
ee
d

th
is
it
em
,a
n
d
h
ow
of
te
n
w
il
lw
e
u
se
it
?
If
p
ra
ct
ic
al
,a
fi
rm
ca
n
or
d
er

it
em
s
ou
t
of
se
as
on
w
h
en
p
ri
ce
s
ar
e
lo
w
.F
in
al
ly
,a
fi
rm
m
ay

co
n
si
d
er
u
si
n
g
cr
ed
it
ca
rd
s
to
m
ak
e
p
u
rc
h
as
es
si
n
ce
th
is
w
il
la
ll
ow

m
or
e
ti
m
e
fo
r
m
ak
in
g
p
ay
m
en
t.

In
ve
n
to
ry

In
ve
n
to
ri
es
h
av
e
se
ve
ra
lh
id
d
en
co
st
s
th
at
ca
n
d
ra
in
ca
sh
fl
ow
.

T
h
es
e

co
st
s
in

cl
u
d
e
st
or
ag
e,
in
su
ra
n
ce
,s
p
oi
la
ge
,h
an
d
li
n
g,
ta
xe
s,

an
d
fi
n
an
ci
n
g.
A
co
m
p
an
y
sh
ou
ld
ge
t
ri
d
of
in
ve
n
to
ry
th
at
is
n
ot

m
ov
in
g.
O
bs
ol
et
e
in
ve
n
to
ry
sh
ou
ld
be
re
m
ov
ed
im
m
ed
ia
te
ly
.A
fi
rm

m
ay
al
so
fi
n
d
n
ew
w
ay
s
of
d
is
p
os
in
g
of
in
ve
n
to
ry
.F
or
ex
am
p
le
,i
t
is

be
tt
er
to
se
ll
in
ve
n
to
ry
at
co
st
s
th
an
n
ot
at
al
l.
T
h
e
ov
er
al
lo
bj
ec
ti
ve

is
to
m
ai
n
ta
in
in
ve
n
to
ry
le
ve
ls
at
a
p
ro
fi
ta
bl
e
le
ve
l.

In
su
ra
n
ce

A
co
m
p
an
y
sh
ou
ld
m
ak
e
su
re
it
d
oe
s
n
ot
ov
er
in
su
re
th
e
bu
si
n
es
s.
A

fi
rm
sh
ou
ld
p
u
rc
h
as
e
in
su
ra
n

ce
in

gr
ou
p
p
ac
ka
ge
s
to
ob
ta
in
th
e

lo
w
es
t
p
re
m
iu
m
s.
It
sh
ou
ld
st
ar
t
by
co
ve
ri
n
g
th
e
la
rg
es
t
ri
sk
s
fi
rs
t.

It
sh
ou
ld
th
en
st
ru
ct
u
re
as
h
ig
h
a
d
ed
u
ct
ib
le
as
is
af
fo
rd
ab
le
.A

co
m
p
an
y
sh
ou
ld
av
oi
d
d
u
p
li
ca
ti
on
an

d
ex

ce
ss
iv
e
in
su
ra
n
ce
an
d

sh
if
t
ce
rt
ai
n
co

st
s,

su
ch
as
h
ea
lt
h
in
su
ra
n
ce
,t
o
th
e
em
p
lo
ye
e

th
ro
u
gh
h
ig
h
er
p
ay
ro
ll
d
ed
u
ct
io
n
s.
In
su
ra
n
ce
sh
ou
ld
be
u
se
d
to

co
ve
r
ri
sk
s
th
at
ar
e
m
at
er
ia
lb
u
t
oc
cu
r
in
fr
eq
u
en
tl
y.

So
u
rc
e:
ht
tp
s:
//
w
w
w
.b
ou
n
d
le
ss
.c
om
/f
in
a
n
ce
/w
or
ki
n
g
-c
a
p
it
a
l-

m
a
n
a
g
em
en
t/
ca
sh
-m
a
n
a
g
em
en
t/
m
a
n
a
g
in
g
-d
is
bu
rs
em
en
ts
/

C
C
-B
Y
-S
A

B
ou
n
d
le
ss
is
a
n
op
en
ly
li
ce
n
se
d
ed
u
ca
ti
on
a
lr
es
ou
rc
e

89
3

M
an

ag
in
g

M
ar
ke

ta
b
le

S
ec

ur
iti
es

Se
ct
io
n
3

S
ec

ur
iti
es

M
an

ag
em

en
t

89
4

ht
tp
s:
//
w
w
w
.b
ou

nd
le
ss
.c
om

/
na

nc
e/
w
or
ki
ng

-c
ap

ita
l-
m
an

ag
em

en
t/
se

cu
rit
ie
s-
m
an

ag
em

en
t/

M
an

ag
in
g
M
ar
ke

ta
b
le

S
ec

ur
iti
es

M
ar
ke

ta
b
le

se
cu

rit
ie
s
re
p
le

ni
sh

ca
sh

q
ui
ck

ly
an

d
ea

rn
hi
gh

er
re
tu
rn
s
th
an

ca
sh

,b
ut

co
m
e
w
ith

ris
ks

;m
at
ur
ity
,

yi
el
d
,a

nd
liq

ui
d
ity

sh
ou

ld
b
e
co

ns
id
er
ed

K
E
Y
P
O
IN
TS

•
M
ar
ke
ta
bl
e
se
cu
ri
ti
es
ar
e
th
e
se
cu
ri
ti
es
th
at
ca
n
be
ea
si
ly

li
qu
id
at
ed
w
it
h
ou
t
an
y
d
el
ay
at
a
re
as
on
ab
le
p
ri
ce
.

•
F
ir
m
s
w
il
lm
ai
n
ta
in
le
ve
ls
of
m
ar
ke
ta
bl
e
se
cu
ri
ti
es
to
en
su
re

th
at
th
ey
ar
e
ab
le
to
qu
ic
kl
y
re
p
le
n
is
h
ca
sh
ba
la
n
ce
s
an
d
to

ob
ta
in
h
ig
h
er
re
tu
rn
s
th
an
is
p
os
si
bl
e
by

m
ai
n
ta
in
in
g
ca
sh
.

•

T
h
er
e
ar
e
fo
u
r
fa
ct
or
s
th
at
in
fl
u
en
ce
th
e
ch
oi
ce
of
m
ar
ke
ta
bl
e

se
cu
ri
ti
es
.T
h
es
e
in
cl
u
d
e
ri
sk
s,
m
at
u
ri
ty
,y
ie
ld
,a
n
d
li
qu
id
it
y.

M
ar
ke
ta
bl
e
se
cu
ri
ti
es
ar
e
se
cu
ri
ti
es
th
at
ca
n
be
ea
si
ly
li
qu
id
at
ed

w
it
h
ou
t
an
y
d
el
ay
at
a
re
as
on
ab
le
p
ri
ce
.I
t
is
th
e
p
ar
t
of
a
co
m
p
an
y’
s

sh
or
t
te
rm
in
ve
st
m
en
t.
F
ir
m
s
w
il
lm
ai
n
ta
in
le
ve
ls
of
m
ar
ke
ta
bl
e

se
cu
ri
ti
es
to
en
su
re
th
at
th
ey
ar
e
ab
le
to
qu
ic
kl
y
re
p
le
n
is
h
ca
sh

ba
la
n
ce
s
an
d
to
ob
ta
in
h
ig
h
er
re
tu
rn
s
th
an
is
p
os
si
bl
e
by

m
ai
n
ta
in
in
g
ca
sh
.

F
ir
m
s
m
ay
h
ol
d
ex
ce
ss
fu
n
d
s
in
an
ti
ci
p
at
io
n
of
ca
sh
ou
tl
ay
.W
h
en

fu
n
d
s
ar
e
be
in
g
h
el
d
fo
r
re
as
on
s
ot
h
er
th
an
im
m
ed
ia
te
tr
an
sa
ct
io
n

p
u
rp
os
es
,t
h
ey
sh
ou
ld
be
co
n
ve
rt
ed
fr
om
ca
sh
in
to
in
te
re
st
-e
ar
n
in
g

m
ar
ke
ta
bl
e
se
cu
ri
ti
es
w
h
ic
h
sh
ou
ld
be
of
h
ig
h
es
t
in
ve
st
m
en
t
gr
ad
e.

T
h
es
e
m
ar
ke
ta
bl
e
se
cu
ri
ti
es
u
su
al
ly
co
n
si
st
of
tr
ea
su
ry
bi
ll
s,

co
m
m
er
ci
al
p
ap
er
,a
n
d
ce
rt
if
ic
at
io
n
of
ti
m
e
d
ep
os
it
s
fr
om

co
m
m
er
ci
al
ba
n
ks
.R
ea
li
st
ic
al
ly
,m
an
ag
em
en
t
of
ca
sh
an
d

m
ar
ke
ta
bl
e
se
cu
ri
ti
es
ca
n
n
ot
be
se
p
ar
at
ed
.M
an
ag
em
en
t
of
on
e

im
p
li
es
m
an
ag
em
en
t
of
th
e
ot
h
er
(F
ig
u
re
18
.8
).

T
h
e
re
as
on
s
fo
r
h
ol
d
in
g
m
ar
ke
ta
bl
e
se
cu
ri
ti
es
ar
e
as
fo
ll
ow
s:

1.
T
h
ey
se
rv
e
as
a
su
bs
ti
tu
te
fo
r
ca
sh
ba
la
n
ce
s.
M
an
y
fi
rm
s

p
re
fe
r
to
h
ol
d
m
ar
ke
ta
bl
e
se
cu
ri
ti
es
as
a
su
bs
ti
tu
te
fo
r

89
5

A
ce

rt
i
ca

te
of

a
$5

d
ep

os
it
in

th
e
U
ni
te
d
S
ta
te
s
P
os

ta
lS

av
in
gs

S
ys
te
m

is
su

ed
on

S
ep

te
m
b
er

10
th
,1

93
2.

Fi
g
ur
e
18

.8
A
M
ar
ke
ta
b
le
S
ec
ur
ity

tr
an
sa
ct
io
n
ba
la
n
ce
s,
p
re
ca
u
ti
on
ar
y
ba
la
n
ce
s,
or
fo
r

sp
ec
u
la
ti
ve
ba
la
n
ce
s
of
fo
r
al
lt
h
re
e.
In
m
os
t
ca
se
s
th
e

se
cu
ri
ti
es
ar
e
h
el
d
p
ri
m
ar
il
y
fo
r
p
re
ca
u
ti
on
ar
y
p
u
rp
os
es
or
as

a
gu
ar
d
ag
ai
n
st
a
p
os
si
bl
e
sh
or
ta
ge
of
ba
n
k
cr
ed
it
.

2.
T
h
ey
ar
e
h
el
d
as
a
te
m
p
or
ar
y
in
ve
st
m
en
t
w
h
er
e
a
re
tu
rn
is

ea
rn
ed
w
h
il
e
fu
n
d
s
ar
e
te
m
p
or
ar
il
y
id
le
.

3.
T
h
ey
ar
e
bu
il
t
u

p
to

m
ee
t
kn
ow
n
fi
n
an
ci
al
re
qu
ir
em
en
ts
su
ch

as
ta
x
p
ay
m
en
ts
,m
at
u
ri
n
g
bo
n
d
is
su
es
,a
n
d
so
on
.

T
h
er
e
ar
e
fo
u
r
fa
ct
or
s
th
at
in
fl
u
en
ce
th
e
ch
oi
ce
of
m
ar
ke
ta
bl
e

se
cu
ri
ti
es
.

1.
R
is
ks a.
d
ef
au
lt
ri
sk
:t
h
e
ri
sk
th
at
th
e
is
su
er
of
th
e
se
cu
ri
ty

ca
n
n
ot
p
ay
th
e
p
ri
n
ci
p
al
or
in
te
re
st
at
d
u
e
d
at
es
.

b.
in
te
re
st
ra
te
ri
sk
:t
h
e
ri
sk
of
d
ec
li
n
es
in
m
ar
ke
t
va
lu
es
of

th
e
se
cu
ri
ty
d
u
e
to
ri
si
n
g
in
te
re
st
ra
te
.

c.
in
fl
at
io
n
ra
te
:t
h
e
ri
sk
th
at
in
fl
at
io
n
w
il
lr
ed
u
ce
th
e
re
al

va
lu
e
of
th
e
in
ve
st
m
en
t.
In
p
er
io
d
s
of
ri
si
n
g
p
ri
ce
s,

in
fl
at
io
n
ri
sk
is

lo
w
er

on
in
ve
st
m
en
ts
w
h
os
e
re
tu
rn
s
te
n
d

to
ri
se
w
it
h
in
fl
at
io
n
th
an
on
in
ve
st
m
en
t
w
h
os
e
re
tu
rn
ar
e

fi
xe
d
.

4.
M
at
u
ri
ty
:M
ar
ke
ta
bl
e
se
cu
ri
ti
es
h
el
d
sh
ou
ld
m
at
u
re
or
ca
n
be

so
ld
at
th
e
sa
m
e
ti
m
e
co
st
is
re
qu
ir
ed
.

5.
Y
ie
ld
or
re
tu
rn
s
on
se
cu
ri
ti
es
:G
en
er
al
ly
,t
h
e
h
ig
h
er
a

se
cu
ri
ty
‘s
ri
sk
th
e
h
ig
h
er
it
s
re
qu
ir
ed
re
tu
rn
.C
or
p
or
at
e

in
ve
st
or
s,
li
ke
ot
h
er
in
ve
st
or
s
m
u
st
m
ak
e
a
tr
ad
e-
of
fb
et
w
ee
n

ri
sk
an
d
re
tu
rn
w
h
en
ch
oo
si
n
g
m
ar
ke
ta
bl
e
se
cu
ri
ti
es
.

B
ec
au
se
th
es
e
se
cu
ri
ti
es
ar
e
ge
n
er
al
ly
h
el
d
ei
th
er
fo
r
sp
ec
if
ic

kn
ow
n
n
ee
d
or
fo
r
u
se
in
em
er
ge
n
ci
es
,t
h
e
p
or
tf
ol
io
sh
ou
ld

co
n
si
st
of
h
ig
h
ly
li
qu
id
sh
or
t-
te
rm
se
cu
ri
ti
es
is
su
ed
by
th
e

go
ve
rn
m
en
t
or
ve
ry
st
ro
n

g
co

rp
or
at
io
n
s.
T
re
as
u
re
rs
sh
ou
ld

n
ot
sa
cr
if
ic
e
sa
fe
ty
fo
r
h
ig
h
er
ra
te
s
of
re
tu
rn
.

6.
M
ar
ke
ta
bi
li
ty
/l
iq
u
id
it
y:
T
h
is
re
fe
rs
to
h
ow
qu
ic
k
th
e

se
cu
ri
ti
es
ca
n
be
so
ld
at
cl
os
e
to
th
e
qu
ot
ed
m
ar
ke
t
p
ri
ce
.

So
u
rc
e:
ht
tp
s:
//
w
w
w
.b
ou
n
d
le
ss
.c
om
/f
in
a
n
ce
/w
or
ki
n
g
-c
a
p
it
a
l-

m
a
n
a
g
em
en
t/
se
cu
ri
ti
es
-m
a
n
a
g
em
en
t/
m
a
n
a
g
in
g
-m
a
rk
et
a
bl
e-

se
cu
ri
ti
es
/

C
C
-B
Y
-S
A

B
ou
n
d
le
ss
is
a
n
op
en
ly
li
ce
n
se
d
ed
u
ca
ti
on
a
lr
es
ou
rc
e

89
6

D
e

ni
ng

A
cc

ou
nt

R
ec

ei
va

b
le

S
et
tin

g
a
C
re
d
it
P
ol
ic
y

Te
rm

s
of

Tr
ad

C
ol
le
ct
io
n

Se
ct
io
n
4

A
cc

ou
nt
s
R
ec

ei
va

b
le

89
7

ht
tp
s:
//
w
w
w
.b
ou

nd
le
ss
.c
om

/
na

nc
e/
w
or
ki
ng

-c
ap

ita
l-
m
an

ag
em

en
t/
ac

co
un

ts
-r
ec

ei
va

b
le
/

D
e

ni
ng

A
cc

ou
nt
s

R
ec

ei
va

b
le

A
cc

ou
nt
s
re
ce

iv
ab

le
re
p
re
se

nt
s
m
on

ey
ow

ed
b
y
en

tit
ie
s

to
th
e
r
m

on
th
e
sa

le
of

p
ro
d
uc

ts
or

se
rv
ic
es

on
cr
ed

it.

K
E
Y
P
O
IN
TS

•
In
m
os
t
bu
si
n
es
se
s,
ac
co
u
n
ts
re
ce
iv
ab
le
is
ex
ec
u
te
d
by

ge
n
er
at
in
g
an
in
vo
ic
e
an
d
ei
th
er
m
ai
li
n
g
or
el
ec
tr
on
ic
al
ly

d
el
iv
er
in
g
it
to
th
e
cu
st
om
er
,w
h
o,
in
tu
rn
,m
u
st
p
ay
it
w
it
h
in

an
es
ta
bl
is
h
ed
ti
m
ef
ra
m
e.

•
A
cc
ou
n
t
re
ce
iv
ab
le
s
ar
e
cl
as
si
fi
ed
as
cu
rr
en
t
as
se
ts
as
su
m
in
g

th
at
th
ey
ar
e
d
u
e
w
it
h
in
on
e
ye
ar
.

•
R
ev
en
u
e
h
as
a
bi
g
im
p
ac
t
on
bo
tt
om
-l
in
e
p
ro
fi
ta
bi
li
ty
,s
o

m
an
ag
er
s
m
ay
be
te
m
p
te
d
to
“m
an
ag
e”
re
ve
n
u
e
re
co
gn
it
io
n
.

D
e
fi
n
in
g
A
cc
o
u
n
ts
R
e
ce
iv
a
b
le

E
ve
ry
bu
si
n
es
s
se
ll
s
p
ro
d
u
ct
s
or
se
rv
ic
es
to
it
s
cu
st
om
er
s.
A
cc
ou
n
ts

re
ce
iv
ab
le
re
p
re
se
n
ts
m
on
ey
ow
ed
by
en
ti
ti
es
to
th
e
fi
rm
on
th
e
sa
le

of
p
ro
d
u
ct
s
or
se
rv
ic
es
on
cr
ed
it
.I
n
m
os
t
bu
si
n
es
se
s,
ac
co
u
n
ts

re
ce
iv
ab
le
is
ex
ec
u
te
d
by
ge
n
er
at
in
g
an
in
vo
ic
e
an
d
ei
th
er
m
ai
li
n
g

or
el
ec
tr
on
ic
al
ly
d
el
iv
er
in
g
it
to
th
e
cu
st
om
er
.I
n
tu
rn
,t
h
e
cu
st
om
er

m
u
st
p
ay
th
e
in
vo
ic
e
w
it
h
in
an
es
ta
bl
is
h
ed
ti
m
ef
ra
m
e,
w
h
ic
h
is

ca
ll
ed
th
e
cr
ed

it
te
rm

s
or
p
ay
m
en
t
te
rm
s.
T
h
e
ac
co
u
n
ts
re
ce
iv
ab
le

d
ep
ar
tm
en
ts
u
se
th
e
sa
le
s
le
d
ge
r,
w
h
ic
h
n
or
m
al
ly
re
co
rd
s:

•
T
h
e
sa
le
s
a
bu
si
n
es
s
h
as
m
ad
e

•
T
h
e
am
ou
n
t
of
m
on
ey
re
ce
iv
ed
fo
r
go
od
s
or
se
rv
ic
es

•
T
h
e
am
ou
n
t
of
m
on
ey
ow
ed
at
th
e
en
d
of
ea
ch
m
on
th

(d
eb
to
rs
)

B
o
o
k
k
e
e
p
in
g

O
n
a
co
m
p
an
y’
s
ba
la
n
ce
sh
ee
t,
ac
co
u
n
ts
re
ce
iv
ab
le
is
th
e
m
on
ey

ow
ed
to
th
at
co
m
p
an
y
by
en
ti
ti
es
ou
ts
id
e
of
th
e
co
m
p
an
y.
T
h
e

re
ce
iv
ab
le
s
ow
ed
by
th
e
co
m
p
an
y’
s
cu
st
om
er
s
ar
e
ca
ll
ed
tr
ad
e

re
ce
iv
ab
le
s.
A
cc
ou
n
t
re
ce
iv
ab
le
s
ar
e
cl
as
si
fi
ed
as
cu
rr
en
t
as
se
ts

as
su
m
in
g
th
at
th
ey
ar
e
d
u
e
w
it
h
in
on
e
ye
ar
.T
h
es
e
ar
e
th
e
fu
n
d
s

m
an
ag
em
en
t

is
co

n
ce
rn
ed
w
it
h
w
h
en
co
n
si
d
er
in
g
w
or
ki
n
g
ca
p
it
al

re
qu
ir
em
en
ts
.

C
om
p
an
ie
s
h
av
e
tw
o
m
et
h
od
s
av
ai
la
bl
e
to
th
em
fo
r
m
ea
su
ri
n
g
th
e

n
et
va
lu
e
of
ac
co
u
n
ts
re
ce
iv
ab
le
,w
h
ic
h
is
ge
n
er
al
ly
co
m
p
u
te
d
by

su
bt
ra
ct
in
g
th
e
ba
la
n
ce
of
an
al
lo
w
an
ce
ac
co
u
n
t
fr
om
th
e
ac
co
u
n
ts

re
ce
iv
ab
le
ac
co
u
n
t.
T
h
e
fi
rs
t
m
et
h
od
is
th
e
al
lo
w
an
ce
m
et
h
od
,

w
h
ic
h
es
ta
bl
is
h
es
an
al
lo
w
an
ce
fo
r
d
ou
bt
fu
la
cc
ou
n
ts
,o
r
ba
d
d
eb
t

p
ro
vi
si
on
,t
h
at
h
as
th
e
ef
fe
ct
of
re
d
u
ci
n
g
th
e
ba
la
n
ce
fo
r
ac
co
u
n
ts

89
8

re
ce
iv
ab
le
.T
h
e
am
ou
n
t
of
th
e
ba
d
d
eb
t
p
ro
vi
si
on
ca
n
be
co
m
p
u
te
d

in
tw
o
w
ay
s:

1.
B
y
re
vi
ew
in
g
ea
ch
in
d
iv
id
u
al
d
eb
t
an
d
d
ec
id
in
g
w
h
et
h
er
it
is

d
ou
bt
fu
l(
a
sp
ec
if
ic
p
ro
vi
si
on
)

2.
B
y
p
ro
vi
d
in
g
fo
r
a
fi
xe
d
p
er
ce
n
ta
ge
(e
.g
.2
%
)
of
to
ta
ld
eb
to
rs

(a
ge
n
er
al
p
ro
vi
si
on
)

T
h
e
se
co
n
d
m
et
h
od
is
th
e
d
ir
ec
t
w
ri
te
-o
ff
m
et
h
od
.I
t
is
si
m
p
le
r
th
an

th
e
al
lo
w
an
ce
m
et
h
od
in
th
at
it
al
lo
w
s
fo
r
on
e
si
m
p
le
en
tr
y
to

re
d
u
ce
ac
co
u
n
ts
re
ce
iv
ab
le
to
it
s
n
et
re
al
iz
ab
le
va
lu
e.
T
h
e
en
tr
y

w
ou

ld
co

n
si
st
of
d
eb
it
in
g
a
ba
d
d
eb
t
ex
p
en
se
ac
co
u
n
t
an
d
cr
ed
it
in
g

th
e
re
sp
ec
ti
ve
ac
co
u
n
ts
re
ce
iv
ab
le
in
th
e
sa
le
s
le
d
ge
r.

R
e
ve
n
u
e
R
e
co
g
n
it
io
n

A
co
m
p
an
y
h
as
a
ch
oi
ce
of
w
h
en
to
ac
tu
al
ly
re
co
gn
iz
e
re
ve
n
u
e
vi
a

va
ri
ou
s
ac
co
u
n
ti
n
g
m
et
h

od
s.

R
ev
en
u
e
h
as
a
bi
g
im
p
ac
t
on
bo
tt
om
–

li
n
e
p
ro
fi
ta
bi
li
ty
,s
o
m
an
ag
er
s
m
ay
be
te
m
p
te
d
to
“m
an
ag
e”
re
ve
n
u
e

re
co
gn
it
io
n
.U
n
d
er
ac
cr
u
al
ac
co
u
n
ti
n
g,
a
fi
rm
ca
n
re
co
gn
iz
e
re
ve
n
u
e

w
h
en
it
h
as
:

•
D
el
iv
er

d
go

od
s
an
d
th
e
ti
tl
e
is
tr
an
sf
er
re
d
to
th
e
bu
ye
r

•
P
er
fo
rm
ed
al
l,
or
a
su
bs
ta
n
ti
al
p
or
ti
on
of
,t
h
e
se
rv
ic
es
to
be

p
ro
vi
d
ed

•
In
cu
rr
ed
a
su
bs
ta
n
ti
al
m
aj
or
it
y
of
th
e
co
st
s,
an
d
th
e
re
m
ai
n
in
g

co
st
s
ca
n
be
re
as
on
ab
ly
es
ti
m
at
ed

•
R
ec
ei
ve
d
ei
th
er
ca
sh
,a
re
ce
iv
ab
le
,o
r
so
m
e
ot
h
er
as
se
t
fo
r

w
h
ic
h
a
re
as
on
ab
ly
p
re
ci
se
va
lu
e
ca
n
be
as
si
gn
ed
or

co
ll
ec
ti
bi
li
ty
is
re
as
on
ab
ly
as
su
re
d

M
an
ag
er
s
ca
n
so
m
et
im
es
tw
ea
k
th
e
p
er
io
d
in
w
h
ic
h
re
ve
n
u
e
is

re
co
gn
iz
ed
to
cr
ea
te
a
m
or
e
at
tr
ac
ti
ve
fi
n
an
ci
al
st
at
em
en
t
fo
r
a

gi
ve
n
ci
rc
u
m
st
an
ce
(F
ig
u
re
18
.9
).

So
u
rc
e:
ht
tp
s:
//
w
w
w
.b
ou
n
d
le
ss
.c
om
/f
in
a
n
ce
/w
or
ki
n
g
-c
a
p
it
a
l-

m
a
n
a
g
em
en
t/
a
cc
ou
n
ts
-r
ec
ei
va
bl
e/
d
ef
in
in
g
-a
cc
ou
n
ts
-r
ec
ei
va
bl
e/

C
C
-B
Y
-S
A

B
ou
n
d
le
ss
is
a
n
op
en
ly
li
ce
n
se
d
ed
u
ca
ti
on
a
lr
es
ou
rc
e

89
9

Th
is
ch

ar
t
la
ys

ou
t

m
et
ho

d
s
fo
r
ac

cr
ui
ng

re
ve

nu
e
an

d
ex

p
en

se
s
in

ac
co

un
tin

Fi
g
ur
e
18

.9
A
cc
ru
al

R
ec
og
ni
tio
n

S
et
tin

g
a
C
re
d
it
P
ol
ic
y

To
es

ta
b
lis
h

a
cr
ed

it
p
ol
ic
y,
a
co

m
p
an

y
m
us

t
es

ta
b
lis
h

cr
ed

it
st
an

d
ar
d
s,

cr
ed

it
te
rm

s,
an

d
a
co

lle
ct
io
n
p
ol
ic
y.

K
E
Y
P
O
IN
TS

•

M
an
ag
em
en
t
m
u
st
d
ec
id
e
on
cr
ed
it
st
an
d
ar
d
s,
w
h
ic
h
in
vo
lv
es

d
ec
is
io
n
s
on
h
ow
m
u
ch
cr
ed
it
ri
sk
to
as
su
m
e.

•
A
n
ot
h
er
im
p
or
ta
n
t
fa
ct
or
in
d
et
er
m
in
in
g
cr
ed
it
st
an
d
ar
d
s

in
vo
lv
es
a
co
m
p
an
y
ev
al
u
at
in
g
th
e
cr
ed
it
w
or
th
in
es
s
of
an

in
d
iv
id
u
al
or
bu
si
n
es
s.

•
A
ft
er
es
ta
bl
is
h
in
g
cr
ed
it
st
an
d
ar
d
s,
th
e
fi
rm
m
u
st
d
ec
id
e
on

th
e
le
n
gt
h
of
th
e
p
er
io
d
be
fo
re
p
ay
m
en
t
m
u
st
be
m
ad
e
an
d

w
h
et
h
er
or
n
ot
th
ey
w
il
lo
ff
er
a
d
is
co
u
n
t
fo
r
ea
rl
y
p
ay
m
en
ts
.

•
T
h
e
la
st
st
ep
is
to
es
ta
bl
is
h
a
co
ll
ec
ti
on
p
ol
ic
y.

S
e
tt
in
g
a
C
re
d
it
P
o
li
cy

T
h
er
e
ar
e
th
re
e
st
ep
s
a
co
m
p
an
y
m
u
st
u
n
d
er
go
w
h
en
d
ev
el
op
in
g
a

cr
ed
it
p
ol
ic
y:

1.
E
st
ab
li
sh
cr
ed
it
st
an
d
ar
d
s.

2.
E
st
ab
li
sh
cr
ed
it
te
rm
s.

3.
E
st
ab
li
sh
a
co
ll
ec
ti
on
p
ol
ic
y.

M
an
ag
em
en
t
m
u
st
d
ec
id
e
on
cr
ed
it
st
an
d
ar
d
s,
w
h
ic
h
in
vo
lv
es

d
ec
is
io
n
s
on
h
ow
m
u
ch
cr
ed
it
ri
sk
to
as
su
m
e.
T
h
es
e
d
ec
is
io
n
s
p
la
y
a

la
rg
e
ro
le
in
d
et
er
m
in
in
g
h
ow
m
u
ch
m
on
ey
a
fi
rm
ti
es
u
p
in
it
s

re
ce
iv
ab
le
s.
A
re
st
ri
ct
iv
e
p
ol
ic
y
w
il
lm
os
t
li
ke
ly
re
su
lt
in
lo
w
er
sa
le
s,

bu
t
th
e
fi
rm
w
il
lh
av
e
a
sm
al
le
r
in
ve
st
m
en
t
in
re
ce
iv
ab
le
s
an
d
in
cu
r

le
ss
b
a
d
-d
e
b
t
lo
ss
e
s.
L
es
s
re
st
ri
ct
iv
e
p
ol
ic
ie
s
w
il
lg
en
er
at
e
h
ig
h
er

sa
le
s
as
w
el
la
s
a
h
ig
h
er
re
ce
iv
ab
le
s
ba
la
n
ce
,b
u
t
th
e
co
m
p
an
y
w
il
l

m
os
t
li
ke
ly
in
cu
r
m
or
e
ba
d
-d
eb
t
lo
ss
es
an
d
a
h
ig
h
op
p
or
tu
n
it
y
co
st

of
h
ol
d
in
g
ca
p
it
al
in
ac
co
u
n
ts
re
ce
iv
ab
le
s.

(F
ig
u
re
18
.1
0
)
A
n
ot
h
er
im
p
or
ta
n
t
fa
ct
or
in
d
et
er
m
in
in
g
cr
ed
it

st
an
d
ar
d
s
in
vo
lv
es
a
co
m
p
an
y
ev
al
u
at
in
g
th
e
cr
ed
it
w
or
th
in
es
s,
or

cr
ed

it
sc

or
e,
of
an
in
d
iv
id
u
al
or
bu
si
n
es
s.
T
h
is
re
fe
rs
to
th
e
ri
sk
th
at

th
e
bu
ye
r
w
il
ld
ef
au
lt
on
ex
te
n
d
ed
cr
ed
it
by
fa
il
in
g
to
m
ak
e

p
ay
m
en
ts
w
h
ic
h
it
is
ob
li
ga
te
d
to
d
o.
P
ot
en
ti
al
lo
ss
es
n
ot
on
ly

90
0

Th
is
ch

ar
t
d
ep

ic
ts

th
e
fa
ct
or
s
th
at

go
in
to

an
in
d
iv
id
ua

l’s
cr
ed

it
sc

or
e.

Fi
g
ur
e
18

.1
0
C
re
d
it

S
co
re
Fa
ct
or
s

in
cl
u
d
e
th
e
se
ll
in
g
p
ri
ce
,b
u
t
ca
n
al
so
in
cl
u
d
e
d
is
ru
p
ti
on
to
ca
sh

fl
ow
s
an
d
in
cr
ea
se
d
co
ll
ec
ti
on
co
st
s.
T
o
re
d
u
ce
it
s
ri
sk
,t
h
e
se
ll
er

m
ay
p
er
fo
rm
a
cr
ed
it
ch
ec
k
on
th
e
bu
ye
r
or
re
qu
ir
e
th
e
bu
ye
r
to
p
u
t

u
p
co
ll
at
er
al
ag
ai
n
st
cr
ed
it
ex
te
n
d
ed
.

O
th
e
r
F
a
ce
ts
o
f
C
re
d
it
P
o
li
ci
e
s

•
A
ft
er
es
ta
bl
is
h
in
g
cr
ed
it
st
an
d
ar
d
s,
th
e
fi
rm
m
u
st
d
ec
id
e
on
th
e

le
n
gt
h
of
th
e
p
er
io
d
th
at
w
ou
ld
be
al
lo
w
ed
be
fo
re
p
ay
m
en
t
m
u
st

be
m
ad
e
an
d
w
h
et
h
er
or
n
ot
th
ey
w
il
lo
ff
er
a
d
is
co
u
n
t
fo
r
ea
rl
y

p
ay
m
en
ts
.I
fa
d
is
co
u
n
t
is
of
fe
re
d
,t
h
e
am
ou
n
t
of
th
e
d
is
co
u
n
t

m
u
st
al
so
be
d
et
er
m
in

ed
.T

h
er
e
ar
e
m
an
y
p
u
rp
os
es
fo
r

d
is
co
u
n
ti
n
g,
su
ch
as
to
m
ov
e
ou
t-
of
-d
at
e
st
oc
k,
to
re
w
ar
d
va
lu
ab
le

cu
st
om
er
s,
as
a
sa
le
s
p
ro
m
ot
io
n
,o
r
to
re
w
ar
d
be
h
av
io
rs
th
at

be
n
ef
it
th
e
d
is
co
u
n
t
is
su
er
.S
om
e
co
m
m
on
ty
p
es
of
d
is
co
u
n
ts

in
cl
u
d
e:

•
P
ro
m
p
t
p
ay
m
en
t
d
is
co
u
n
t.

•
P
re
fe
rr
ed
p
ay
m
en
t
d
is
co
u
n
t
(s
u
ch
as
ca
sh
ov
er
cr
ed
it
ca
rd
).

•
P
ar
ti
al
p
ay
m
en
t
d
is
co
u
n
t.

•
Se
as
on
al
d
is
co
u
n
t
(f
or
or
d
er
s
p
la
ce
d
in
a
sl
ac
k
p
er
io
d
fo
r

ex
am
p
le
).

•
T
ra
d
e
d
is
co
u
n
t
(u
su
al
ly
gi
ve
n
w
h
en
th
e
bu
ye
r
ag
re
es
to

p
er
fo
rm
so
m
e
fu
n
ct
io
n
).

•
Q
u
an
ti
ty
d
is
co
u
n
t.

T
h
e
la
st
st
ep
is
to
es
ta
bl
is
h
a
co
ll
e
ct
io
n
p
o
li
cy
.C
ol
le
ct
io
n
p
ol
ic
ie
s

va
ry
w
id
el
y
am
on
g
in
d
u
st
ri
es
.S
om
e
co
m
p
an
ie
s
d
o
n
ot
h
in
g
w
h
en

th
ei
r
cu
st
om
er
s
d
on
‘t
p
ay
.O
th
er
s
se
n
d
ou
t
a
re
m
in
d
er
n
ot
if
yi
n
g

cu
st
om
er
s
th
at
th
ei
r
p
ay
m
en
t
is
la
te
.S
om
e
co
m
p
an
ie
s
m
ay
ev
en

ta
ke
le
ga
la
ct
io
n
at
th
e
fi
rs
t
la
te
p
ay
m
en
t.

T
h
e
F
iv
e
C
‘s
O
f
C
re
d
it

•
C
h
ar
ac
te
r:
Is
th
e
bo
rr
ow
er
tr
u
st
w
or
th
y
w
it
h
a
h
is
to
ry
of

m
ee
ti
n
g
it
s
d
eb
t
ob
li
ga
ti
on
s?

•
C
ap
ac
it
y:
W
il
lt
h
e
bo
rr
ow
er
h
av
e
en
ou
gh
ca
sh
fl
ow
to
m
ak
e
it
s

p
ay
m
en
ts
?

•
C
ap
it
al
😀
oe
s
th
e
bo
rr
ow
er
h
av
e
en
ou
gh
ca
p
it
al
to
ju
st
if
y
th
e

lo
an
?

•
C
ol
la
te
ra
l:
D
oe
s
th
e
bo
rr
ow
er
h
av
e
an
y
as
se
ts
th
at
ca
n
se
cu
re

th
e
lo
an
?

•
C
on
d
it
io
n
s:
H
ow
ar
e
bo
th
th
e
bo
rr
ow
er
an
d
th
e
ec
on
om
y

p
er
fo
rm
in
g
an
d
h
ow
ar
e
th
ey
ex
p
ec
te
d
to
p
er
fo
rm
?

So
u
rc
e:
ht
tp
s:
//
w
w
w
.b
ou
n
d
le
ss
.c
om
/f
in
a
n
ce
/w
or
ki
n
g
-c
a
p
it
a
l-

m
a
n
a
g
em
en
t/
a
cc
ou
n
ts
-r
ec
ei
va
bl
e/
se
tt
in
g
-a
-c
re
d
it
-p
ol
ic
y/

C
C
-B
Y
-S
A

B
ou
n
d
le
ss
is
a
n
op
en
ly
li
ce
n
se
d
ed
u
ca
ti
on
a
lr
es
ou
rc
e

90
1

Te
rm

s
of

Tr
ad

e
Te

rm
s
of

tr
ad

e
cr
ed

it
in
cl
ud

e
th
e
am

ou
nt

of
tim

e
al
lo
w
ab

le
fo
r
p
ay

m
en

t
to

b
e
re
ce

iv
ed

,i
nc

lu
d
in
g
an

y
p
ot
en

tia
ld

is
co

un
ts
.

K
E
Y
P
O
IN
TS

•
C
re
d
it
te
rm
s
ar
e
of
te
n
qu
ot
ed
“n
et
X
”
w
it
h
X
be
in
g
a
ce
rt
ai
n

n
u
m
be
r
of
d
ay
s.

•
A
n
ex
am
p
le
of
a
co
m
m
on
p
ay
m
en
t
te
rm
is
N
et
30
,w
h
ic
h

m
ea
n
s
th
at
p
ay
m
en
t
is
d
u
e
at
th
e
en
d
of
30
d
ay
s
fr
om
th
e

d
at
e
th
e
in
vo
ic
e
is
is
su
ed
.

•
T
h
e
d
eb
to
r
is
fr
ee
to
p
ay
be
fo
re
th
e
d
u
e
d
at
e,
an
d
m
an
y

bu
si
n
es
se
s
ca
n
of
fe
r
a
d
is
co
u
n
t
fo
r
ea
rl
y
p
ay
m
en
t.

•
A
d
is
co
u
n
t
st
at
ed
as
2/
10
,n
et
30
m
ea
n
s
th
at
th
e
bu
yi
n
g
fi
rm

w
il
lr
ec
ei
ve
a
tw
o
p
er
ce
n
t
d
is
co
u
n
t
if
it
p
ay
s
by
th
e
te
n
th
d
ay
,

or
el
se

th
ey
w
il
lp
ay
th
e
fu
ll
am
ou
n
t
in
30
d
ay
s.

T
e
rm
s
o
f
T
ra
d
e

C
re
d
it
te
rm
s
ar
e
of
te
n
qu
ot
ed
as
“n
et
X
”
w
it
h
X
be
in
g
a
ce
rt
ai
n

n
u
m
be
r
of
d
ay
s.
A
n
ex
am
p
le
of
a
co
m
m
on
p
ay
m
en
t
te
rm
is
N
et
30
,

w
h
ic
h
m
ea
n
s
th
at
p
ay
m
en
t
is
d
u
e
at
th
e
en
d
of
30
d
ay
s
fr
om
th
e

d
at
e
th
e
in
vo
ic
e
is
is
su
ed
.T
ra
n
si
t
ti
m
e
is
in
cl
u
d
ed
w
h
en
co
u
n
ti
n
g

th
e
d
ay
s,
i.e
.a
p
u
rc
h
as
e
in
tr
an
si
t
fo
r
7
d
ay
s
be
fo
re
re
ce
ip
t
h
as
ju
st

23
ad
d
it
io
n
al
d
ay
s
u
n
ti
lp
ay
m
en
t
is
d
u
e
to
th
e
se
ll
er
.

O
th
er
co
m
m
on
p
ay
m
en
t
te
rm
s
in
cl
u
d
e
N
et
45
,N
et
60
an
d
30
d
ay
s

en
d
of
m
on
th
.N
et
30
is
a
te
rm
th
at
m
os
t
bu
si
n
es
s
an
d

m
u
n
ic
ip
al
it
ie
s
(f
ed
er
al
,s
ta
te
an
d
lo
ca
l)
u
se
in
th
e
U
n
it
ed
St
at
es
.N
et

10
an
d
N
et
15
is
w
id
el
y
u
se
d
as
w
el
l.
N
et
60
is
le
ss
u
se
d
be
ca
u
se
of

it
s
lo
n
ge
r
p
ay
m
en
t
te
rm
s.

T
h
e
d
eb
to
r
is
fr
ee
to
p
ay
be
fo
re
th
e
d
u
e
d
at
e,
an
d
so
m
e
bu
si
n
es
se
s

of
fe
r
a
d
is
co
u
n
t
fo
r
ea
rl
y
p
ay
m
en
t.
A
d
is
co
u
n
t
ca
n
be
of
fe
re
d
an
d

st
at
ed
as
“2
/1
0
,n
et
30
“.
T
h
is
m
ea
n
s
th
at
th
e
bu
yi
n
g
fi
rm
w
il
l

re
ce
iv
e
a
tw
o
p
er
ce
n
t
d
is
co
u
n
t
if
it
p
ay
s
by
th
e
te
n
th
d
ay
,o
th
er
w
is
e

th
ey
w
il
lp
ay
th
e
fu
ll
am
ou
n
t
in
30
d
ay
s.

L
et
‘s
co
n
si
d
er
a
p
ot
en
ti
al
ca
se
of
th
e
op
er
at
or
of
an
ic
e
cr
ea
m
st
an
d
.

T
h
e
op
er
at
or
m
ay
si
gn
a
fr
a
n
ch
is
in
g
ag
re
em
en
t,
u
n
d
er
w
h
ic
h
th
e

d
is
tr
ib
u
to
r
ag
re
es
to
p
ro
vi
d
e
ic
e
cr
ea
m
st
oc
k
u
n
d
er
th
e
te
rm
s
“N
et

60
”
w
it
h
a
te
n
p
er
ce
n
t
d
is
co
u
n
t
on
p
ay
m
en
t
w
it
h
in
30
d
ay
s,
an
d
a

20
%

d
is
co
u
n
t
on
p
ay
m
en
t
w
it
h
in
10
d
ay
s.
T
h
is
m
ea
n
s
th
at
th
e

op
er
at
or
h
as
60
d
ay
s
to
p
ay
th
e
in
vo
ic
e
in
fu
ll
.I
fs
al
es
ar
e
go
od

w
it
h
in
th
e
fi
rs
t
w
ee
k,
th
e
op
er
at
or
m
ay
be
ab
le
to
se
n
d
a
ch
ec
k
fo
r

al
lo
r
p
ar
t
of
th
e
in
vo
ic
e,
an
d
m
ak
e
an
ex
tr
a
20
%
on
th
e
ic
e
cr
ea
m

so
ld
.H
ow
ev
er
,i
fs
al
es
ar
e
sl
ow
,l
ea
d
in
g
to
a
m
on
th
of
lo
w
ca
sh
fl
ow
,

th
en
th
e
op
er
at
or
m
ay
d
ec
id
e
to
p
ay
w
it
h
in
30
d
ay
s,
ob
ta
in
in
g
a

10
%
d
is
co
u
n
t,
or
u
se
th
e
m
on
ey
an
ot
h
er
30
d
ay
s
an
d
p
ay
th
e
fu
ll

90
2

in
vo
ic
e
am
ou
n
t
w
it
h
in
60
d
ay
s.
T
h
e
ic
e
cr
ea
m
d
is
tr
ib
u
to
r
ca
n
d
o
th
e

sa
m
e
th
in
g,
re
ce
iv
in
g
tr
a
d
e
cr
e
d
it
fr
om
m
il
k
an
d
su
ga
r
su
p
p
li
er
s

on
te
rm
s
of
N
et
30
,2
%
d
is
co
u
n
t
if
p
ai
d
w
it
h
in
te
n
d
ay
s.
U
n
d
er
th
is

ag
re
em
en
t,
th
ey
ar
e
ap
p
ar
en
tl
y
ta
ki
n
g
a
lo
ss
or
d
is
ad
va
n
ta
ge
ou
s

p
os
it
io
n
in
th
is
w
eb
of
tr
ad
e
cr
ed
it
ba
la
n
ce
s.
W
h
y
w
ou
ld
th
ey
d
o

th
is
?
F
ir
st
,t
h
ey
h
av
e
a
su
bs
ta
n
ti
al
m
ar
ku
p
on
th
e
in
gr
ed
ie
n
ts
an
d

ot
h
er
co
st
s
of
p
ro
d
u
ct
io
n
of
th
e
ic
e
cr
ea
m
th
ey
se
ll
to
th
e
op
er
at
or
.

T
h
e
m
ar
ku
p
is
th
e
p
or
ti
on
of
se
ll
in
g
p
ri
ce
ad
d
ed
to
th
e
co
st
of

ob
ta
in
in
g
th
e
in
ve
n
to
ry
(F
ig
u
re
18
.1
1)
.I
n
ad
d
it
io
n
,i
t
is
n
ot
in
th
e

d
is
tr
ib
u
to
r’
s
be
st
in
te
re
st
fo
r
cu
st
om
er
s
to
go
ou
t
of
bu
si
n
es
s
d
u
e
to

ca
sh
fl
ow
in
st
ab
il
it
ie
s,
so
it
s
fi
n
an
ci
al
te
rm
s
ai
m
:

1.
T
o
al
lo
w
st
ar
t-
u
p
s
th
e
ab
il
it
y
to
m
an
ag
e
th
ei
r
in
ve
n
to
ry

in
ve
st
m
en
ts
–
ef
fe
ct
iv
el
y
gi
vi
n
g
th
em
a
sh
or
t-
te
rm
bu
si
n
es
s

lo
an
.

2.
B
y
tr
ac
ki
n
g
w
h
ic
h
cu
st
om
er
s
p
ay
,a
n
d
w
h
en
,t
h
e
d
is
tr
ib
u
to
r

ca
n
id
en
ti
fy
p
ro
bl
em
s
th
at
ar
e
d
ev
el
op
in
g
an
d
ta
ke
st
ep
s
to

re
d
u
ce
or
in
cr
ea
se
it
s
am
ou
n
t
of
tr
ad
e
cr
ed
it
.

So
u
rc
e:
ht
tp
s:
//
w
w
w
.b
ou
n
d
le
ss
.c
om
/f
in
a
n
ce
/w
or
ki
n
g
-c
a
p
it
a
l-

m
a
n
a
g
em
en
t/
a
cc
ou
n
ts
-r
ec
ei
va
bl
e/
te
rm
s-
of
-t
ra
d
e/

C
C
-B
Y
-S
A

B
ou
n
d
le
ss
is
a
n
op
en
ly
li
ce
n
se
d
ed
u
ca
ti
on
a
lr
es
ou
rc
e

C
ol
le
ct
io
n

C
om

p
an

s
us

e
d
i
er
en

t
m
et
ho

d
s
to

co
lle
ct

th
ei
r

ou
ts
ta
nd

in
g
re
ce

iv
ab

le
s,

lik
e
se

nd
in
g
ou

t
re
m
in
d
er
s
or

em
p
lo
yi
ng

a
co

lle
ct
io
n
ag

en
cy
.

K
E
Y
P
O
IN
TS

•
C
ol
le
ct
in
g
on
ac
co
u
n
ts
re
ce
iv
ab
le
is
th
e
fi
n
al
st
ep
in
th
e
cr
ed
it

ex
te
n
si
on
p
ro
ce
ss
,a
n
d
ar
gu
ab
ly
th
e
m
os
t
d
if
fi
cu
lt
.

•
A
cc
ou
n
ts
re
ce
iv
ab
le
d
ay
s
an
d
an
ag
in
g
sc
h
ed
u
le
ar
e
to
ol
s

u
se
d
to
m
on
it
or
ac
co
u
n
ts
re
ce
iv
ab
le
.

•
T
h
e
ac
co
u
n
ts
re
ce
iv
ab
le
d
ay
s
is
th
e
av
er
ag
e
n
u
m
be
r
of
d
ay
s

th
at
it
ta
ke
s
a
fi
rm
to
co
ll
ec
t
on
it
s
sa
le
s.
T
h
e
ag
in
g
sc
h
ed
u
le

te
go

ri
ze
s
ac
co
u
n
ts
by
th
e
n
u
m
be
r
of
d
ay
s
th
ey
h
av
e
be
en
on

th
e
bo
ok
s.

•
A
co
m
p
an
y
m
ay
p
ro
te
ct
ag
ai
n
st
ba
d
-d
eb
ts
lo
ss
es
by

p
u
rc
h
as
in
g
tr
ad
e
cr
ed
it
in
su
ra
n
ce
.

90
3

Th
is
eq

ua
tio

n
sh

ow
s
th
e
n

d
in
g
of

se
lli
ng

p
ric

e
fo
r
a
ve

nd
or

b
y
ad

d
in
g

its
m
ar
ku

p
to

its
co

st
.

Fi
g
ur
e
18

.1
1
M
ar
ku
p

C
o
ll
e
ct
io
n
P
o
li
cy

C
ol
le
ct
in
g
u
p
on
ac
co
u
n
ts
re
ce
iv
ab
le
is
th
e
fi
n
al
st
ep
in
th
e
cr
ed
it

ex
te
n
si
on
p
ro
ce
ss
,a
n
d
ar
gu
ab
ly
th
e
m
os
t
d
if
fi
cu
lt
.I
n
d
ea
li
n
g
w
it
h

co
ll
ec
ti
on
s,
it
is
im
p
or
ta
n
t
fo
r
a
fi
rm
to
st
ar
t
by
m
on
it
or
in
g
it
s

ac
co
u
n
ts
re
ce
iv
ab
le
in
or
d
er
to
d
et
er
m
in
e
w
h
et
h
er
it
s
p
ol
ic
y
is

w
or
ki
n
g
to
th
e
be
st
ad
va
n
ta
ge
of
th
e
co
m
p
an
y.
A
cc
ou
n
ts
re
ce
iv
ab
le

d
ay
s
an
d
an
ag
in
g
sc
h
ed
u
le
ar
e
th
e
m
os
t
co
m
m
on
m
on
it
or
to
ol
s

u
se
d
.

A
cc
o
u
n
ts
R
e
ce
iv
a
b
le
D
a
ys

T
h
e
ac
co
u
n
ts
re
ce
iv
ab
le
d
ay
s
is
th
e
av
er
ag
e
n
u
m
be
r
of
d
ay
s
th
at
it

ta
ke
s
a
fi
rm
to
co
ll
ec
t
on
it
s
sa
le
s.
B
y
co
m
p
ar
in
g
th
is
n
u
m
be
r
to
th
e

n
u
m
be
r
in
th
e
cr
ed
it
p
ol
ic
y,
a
bu
si
n
es
s
ca
n
d
et
er
m
in
e
w
h
et
h
er
it
s

p
ol
ic
y
is
ef
fe
ct
iv
e
or
n
ot
.T
h
e
ac
co
u
n
ts
re
ce
iv
ab
le
d
ay
s
is
im
p
or
ta
n
t

be
ca
u
se
in
ve
st
or
s
u
ti
li
ze
th
is
m
ea
su
re
to
ev
al
u
at
e
a
fi
rm
‘s
cr
ed
it

m
an
ag
em
en
t
p
ol
ic
y.
T
h
is
m
et
h
od
d
oe
s
h
av
e
it
s
w
ea
kn
es
se
s.

Se
as
on
al
sa
le
s
p
at
te
rn
s
m
ay
ca
u
se
ac
co
u
n
ts
re
ce
iv
ab
le
d
ay
s
to

ch
an
ge
d
ep
en
d
in
g
on
w
h
en
th
e
ca
lc
u
la
ti
on
oc
cu
rs
.T
h
er
ef
or
e,

m
an
ag
em

en
t
ca

n
p
ot
en
ti
al
ly
m
an
ip
u
la
te
ac
co
u
n
ts
re
ce
iv
ab
le
d
ay
s
to

h
id
e
im
p
or
ta
n
t

in
fo
rm
at
io
n
.

A
g
in
g
S
ch
e
d
u
le

T
h
e
ot
h
er
m
et
h
od
co
m
m
on
ly
u
se
d
is
an
ag
in
g
sc
h
ed
u
le
w
h
ic
h

ca
te
go
ri
ze
s
ac
co
u
n
ts
by
th
e
n
u
m
be
r
of
d
ay
s
th
ey
h
av
e
be
en
on
th
e

bo
ok
s.
It
ca
n
be
co
n
st
ru
ct
ed
in
on
e
of
tw
o
w
ay
s:
u
si
n
g
th
e
n
u
m
be
r

of
ac
co
u
n
ts
or
u
si
n
g
th
e
d
ol
la
r
am
ou
n
t
of
th
e
ou
ts
ta
n
d
in
g
ac
co
u
n
ts

re
ce
iv
ab
le
.I
ft
h
e
p
er
ce
n
ta
ge
s
in
th
e
lo
w
er
h
al
fo
ft
h
e
sc
h
ed
u
le
be
gi
n

to
in
cr
ea
se
,t
h
e
fi
rm
n
ee
d
s
to
ev
al
u
at
e
th
e
ef
fe
ct
iv
en
es
s
of
it
s
cr
ed
it

p
ol
ic
y.
P
ay
m
en
t
p
at
te
rn
s
p
ro
vi
d
e
in
fo
rm
at
io
n
on
th
e
p
er
ce
n
ta
ge
of

m
on
th
ly
sa
le
s
th
at
th
e
fi
rm
co
ll
ec
ts
ea
ch
m
on
th
af
te
r
th
e
sa
le
.T
h
e

p
ay
m
en
t
p
at
te
rn
ca
n
be
u
se
d
to
fo
re
ca
st
th
e
w
or
ki
n
g
ca
p
it
al
n
ee
d
s

fo
r
th
e
bu
si
n
es
s.

R
e
ce
iv
a
b
le
T
u
rn
o
ve
r
R
a
ti
o

A
n
ot
h
er
w
ay
to
ev
al
u
at
e
a
cr
ed
it
p
ol
ic
y
is
to
lo
ok
at
th
e
re
ce
iv
ab
le

tu
rn
ov
er
ra
ti
o.
T
h
is
is
a
fi
n
an
ci
al
ra
ti
o
th
at
m
ea
su
re
s
th
e
n
u
m
be
r
of

ti
m
es
,o
n
av
er
ag
e,
re
ce
iv
ab
le
s
ar
e
co
ll
ec
te
d
d
u
ri
n
g
a
p
er
io
d
.

C
o
ll
e
ct
in
g
R
e
ce
iv
a
b
le
s

(F
ig
u
re
18
.1
2)
T
h
er
e
ar
e
se
ve
ra
lm
et
h
od
s
co
m
p
an
ie
s
ca
n
u
se
to

co
ll
ec
t
th
ei
r
ou
ts
ta
n
d
in
g
re
ce
iv
ab
le
s.
So
m
e
d
o
n
ot
h
in
g,
so
m
e
se
n
d

ou
t
re
m
in
d
er
s
n
ot
if
yi
n
g
cu
st
om
er
s
of
la
te
p
ay
m
en
t,
an
d
so
m
e
ta
ke

le
ga
la
ct
io
n
–
so
m
et
im
es
at
th
e
fi
rs
t
la
te
p
ay
m
en
t.
If
fi
rm
s
so
ch
oo
se
,

th
ey
ca
n
u
ti
li
ze
a
co
ll
ec
ti
on
ag
en
cy
.A
co
ll
ec
ti
on
ag
en
cy
is
a
bu
si
n
es
s

th
at
p
u
rs
u
es
p
ay
m
en
ts
of
d
eb
ts
ow
ed
by
in
d
iv
id
u
al
s
or
bu
si
n
es
se
s.

M
os
t
co
ll
ec
ti
on
ag
en
ci
es
op
er
at
e
as
ag
en
ts
of
cr
ed
it
or
s
an
d
co
ll
ec
t

d
eb
ts
fo
r
a
fe
e
or
p
er
ce
n
ta
ge
of
th
e
to
ta
la
m
ou
n
t
ow
ed
.T
h
er
e
ar
e

m
an
y
ty
p
es
of
co
ll
ec
ti
on
ag
en
ci
es
.F
ir
st
-p
ar
ty
ag
en
ci
es
ar
e

90
4

of
te
n
ti
m
es
a
su
bs
id
ia
ry
of
th
e
or
ig
in
al
co
m
p
an
y
to
w
h
om
th
e
d
eb
t
is

ow
ed
.T
h
ir
d
-p
ar
ty
ag
en
ci
es
ar
e
se
p
ar
at
e
co
m
p
an
ie
s
co
n
tr
ac
te
d
by
a

bu
si
n
es
s
to
co
ll
ec
t
d
eb
ts
on
th
ei
r
be
h
al
ff
or
a
fe
e.
A
co
m
p
an
y
m
ay

p
ro
te
ct
ag
ai
n
st
ba
d
-d
eb
ts
lo
ss
es
by
p
u
rc
h
as
in
g
tr
ad
e
cr
ed
it

in
su
ra
n
ce
.T
h
is
is
an
in
su
ra
n
ce
p
ol
ic
y
an
d
a
ri
sk
m
an
ag
em
en
t

p
ro
d
u
ct
of
fe
re
d
by
p
ri
va
te
in
su
ra
n
ce
co
m
p
an
ie
s

an
d
go

ve
rn
m
en
ta
l

e
x
p
o
rt
cr
ed
it
ag
en
ci
es
to
bu
si
n
es
s
en
ti
ti
es
w
is
h
in
g
to
p
ro
te
ct
th
ei
r

ac
co
u
n
ts
re
ce
iv
ab
le
s
fr
om
lo
ss
d
u
e
to
cr
ed
it
ri
sk
s
li
ke
p
ro
tr
ac
te
d

d
ef
au
lt
,i
n
so
lv
en
cy
,o
r
ba
n
kr
u
p
tc
y.

So
u
rc
e:
ht
tp
s:
//
w
w
w
.b
ou
n
d
le
ss
.c
om
/f
in
a
n
ce
/w
or
ki
n
g
-c
a
p
it
a
l-

m
a
n
a
g
em
en
t/
a
cc
ou
n
ts
-r
ec
ei
va
bl
e/
co
ll
ec
ti
on
/

C
C
-B
Y
-S
A

B
ou
n
d
le
ss
is
a
n
op
en
ly
li
ce
n
se
d
ed
u
ca
ti
on
a
lr
es
ou
rc
e

90
5

Th
is
is
an

ex
am

p
le

of
a
le
tt
er

fr
om

a
co

lle
ct
io
n
ag

en
cy

o
er
in
g
to

se
tt
le

a
d
eb

Fi
g
ur
e
18

.1
2

C
ol
le
ct
io
n
Le
tt
er

In
ve

nt
or
y

Ty
p
es

In
ve

nt
or
y
Te

ni
q
ue

A
B
C

Te
ch

ni
q
ue

S
ea

so
na

lP
ro
d
uc

tio
n

Im
p
ac

t
of

In
a

tio
n

In
ve

nt
or
y

C
os

E
co

no
m
ic

rd
er

Q
ua

nt
ity

Te
ch

ni
q
ue

Ju
st

-I
n-
Ti
m
e
Te

ch
ni
q
ue

Se
ct
io
n
5

In
ve

nt
or
y
M
an

ag
em

en
t

90
6

ht
tp
s:
//
w
w
w
.b
ou

nd
le
ss
.c
om

/
na

nc
e/
w
or
ki
ng

-c
ap

ita
l-
m
an

ag
em

en
t/
in
ve

nt
or
y-
m
an

ag
em

en
t/

In
ve

nt
or
y
Ty
p
es

M
os

t
m
an

uf
ac

tu
rin

g
or
ga

ni
za

tio
ns

us
ua

lly
d
iv
id
e
th
ei
r

in
ve

nt
or
y
in
to

ra
w

m
at
er
ia
ls
,w

or
k
in

p
ro
ce

ss
,

ni
sh

ed
go

od
s,

an
d
go

od
s
fo
r
sa

le
s.

K
E
Y
P
O
IN
TS

•
1.
R
aw
m
at
er
ia
ls
:M
at
er
ia
ls
an
d
co
m
p
on
en
ts
sc
h
ed
u
le
d
fo
r

u
se

in
m
ak
in
g
a
p
ro
d
u
ct
.

•
2.
W
or
k
in
p
ro
ce
ss
,W
IP
:M
at
er
ia
ls
an
d
co
m
p
on
en
ts
th
at

h
av
e
be
ga
n
th
ei
r
tr
an
sf
or
m
at
io
n
to
fi
n
is
h
ed
go
od
s.

•
3.
F
in
is
h
ed
go
od
s:
G
oo
d
s
re
ad
y
fo
r
sa
le
to
cu
st
om
er
s.

•
4.
G
oo
d
s
fo
r
re
sa
le
–
re
tu
rn
ed
go
od
s
th
at
ar
e
sa
la
bl
e.

M
os
t
m
an
u
fa
ct
u
ri
n
g
or
ga
n
iz
at
io
n
s
u
su
al
ly
d
iv
id
e
th
ei
r
in
ve
n
to
ry

in
to
ra
w
m
at
er
ia
ls
,

w
or
k
in

p
ro
ce
ss
,f
in
is
h
ed
go
od
s,
an
d
go
od
s
fo
r

sa
le
s.
A
go
od
p
u
rc
h
as
ed
as
a
“r
aw
m
at
er
ia
l”
go
es
in
to
th
e

m
an
u
fa
ct
u
re
of
a
p
ro
d
u
ct
.A
go
od
on
ly
p
ar
ti
al
ly
co
m
p
le
te
d
d
u
ri
n
g

th
e
m
an
u
fa
ct
u
ri
n
g
p
ro
ce
ss
is
ca
ll
ed
“w
or
k
in
p
ro
ce
ss
.”
W
h
en
th
e

go
od
is
co
m
p
le
te
d
as
to
m
an
u
fa
ct
u
ri
n
g
bu
t
n
ot
ye
t
so
ld
or

d
is
tr
ib
u
te
d
to
th
e
en
d
-u
se
r,
it
is
ca
ll
ed
a
“f
in
is
h
ed
go
od
.”
(F
ig
u
re
18
.

13
)

1.
R
aw
m
at
er
ia
ls
:M
at
er
ia
ls
an
d
co
m
p
on
en
ts
sc
h
ed
u
le
d
fo
r
u
se

in
m
ak
in
g
a
p
ro
d
u
ct
.

2.
W
or
k
in
p
ro
ce
ss
,W
IP
:M
at
er
ia
ls
an
d
co
m
p
on
en
ts
th
at
h
av
e

be
ga
n
th
ei
r
tr
an
sf
or
m
at
io
n
to
fi
n
is
h
ed
go
od
s.
T
h
es
e
it
em
s

ar
e
n
ot
ye
t
co
m
p
le
te
d
bu
t
ei
th
er
ju
st
be
in
g
fa
br
ic
at
ed
or

w
ai
ti
n
g
in
a
qu
eu
e
fo
r
fu
rt
h
er
p
ro
ce
ss
in
g
or
in
a
bu
ff
er

st
or
ag
e.
T
h
e
te
rm
is
u
se
d
in
p
ro
d
u
ct
io
n
an
d
su
p
p
ly
ch
ai
n

m
an
ag
em
en
t.
O
p
ti
m
al
p
ro
d
u
ct
io
n
m
an
ag
em
en
t
ai
m
s
to

m
in
im
iz
e
w
or
k
in
p
ro
ce
ss
.W
or
k
in
p
ro
ce
ss
re
qu
ir
es
st
or
ag
e

sp
ac
e,
re
p
re
se
n
ts
bo
u
n
d
ca
p
it
al
n
ot
av
ai
la
bl
e
fo
r
in
ve
st
m
en
t,

an
d
ca
rr
ie
s
an
in
h
er
en
t
ri
sk
of
ea
rl
ie
r
ex
p
ir
at
io
n
of
sh
el
fl
if
e

of
th
e
p
ro
d
u
ct
s.
A
qu
eu
e
le
ad
in
g
to
a
p
ro
d
u
ct
io
n
st
ep
sh
ow
s

90
7

Fr
om

ra
w

m
at
er
ia
ls
to

w
or
k
in

p
ro
ce

ss
to

n
is
he

d
go

od
s.

Fi
g
ur
e
18

.1
3

M
an
uf
ac
tu
rin
g

p
ro
ce
ss

th
at
th
e
st
ep
is
w
el
lb
u
ff
er
ed
fo
r
sh
or
ta
ge
in
su
p
p
li

es
fr
om

p
re
ce
d
in
g
st
ep
s,
bu
t
m
ay
al
so
in
d
ic
at
e
in
su
ff
ic
ie
n
t
ca
p
ac
it
y
to

p
ro
ce
ss
th
e
ou
tp
u
t
fr
om
th
es
e
p
re
ce
d
in
g
st
ep
s.
Ju
st
-i
n
-t
im
e

(a
cr
on
ym
:J
IT
)
p
ro
d
u
ct
io
n
is
a
co
n
ce
p
t
to
re
d
u
ce
w
or
k
in

p
ro
ce
ss
w
it
h
re
sp
ec
t
to
a
co
n
ti
n
u
ou
s
co
n
fi
gu
ra
ti
on
of

p
ro
d
u
ct
.S
om
et
im
es
,o
u
ts
id
e
of
a
p
ro
d
u
ct
io
n
an
d

co
n
st
ru
ct
io
n
co
n
te
xt
“w
or
k
in
p
ro
ce
ss
”
is
u
se
d
er
ro
n
eo
u
sl
y

w
h
er
e
th
e
st
at
u
s
“w
or
k
in
p
ro
gr
es
s”
w
ou
ld
be
co
rr
ec
tl
y
u
se
d

to
d
es
cr
ib
e
m
or
e
br
oa
d
ly
w
or
k
th
at
is
n
ot
ye
t
a
fi
n
al
p
ro
d
u
ct
.

3.
F
in
is
h
ed
go
od
s:
G
oo
d
s
re
ad
y
fo
r
sa
le
to
cu
st
om
er
s.
F
in
is
h
ed

go
od
s
is
a
re
la
ti
ve
te
rm
.I
n
a
su
p
p
ly
ch
ai
n
m
an
ag
em
en
t
fl
ow
;

th
e
fi
n
is
h
ed
go
od
s
of
a
su
p
p
li
er
ca
n
co
n
st
it
u
te
th
e
ra
w

m
at
er
ia
lo
fa
bu
ye
r.

4.
G
oo
d
s
fo
r
re
sa
le
:R
et
u
rn
ed
go
od
s
th
at
ar
e
sa
la
bl
e.

So
u
rc
e:
ht
tp
s:
//
w
w
w
.b
ou
n
d
le
ss
.c
om
/f
in
a
n
ce
/w
or
ki
n
g
-c
a
p
it
a
l-

m
a
n
a
g
em
en
t/
in
ve
n
to
ry
-m
a
n
a
g
em
en
t/
in
ve
n
to
ry
-t
yp
es
/

C
C
-B
Y
-S
A

B
ou
n
d
le
ss
is
a
n
op
en
ly
li
ce
n
se
d
ed
u
ca
ti
on
a
lr
es
ou
rc
e

In
ve

nt
or
y
Te
ch

ni
q
ue

s
FI
FO

L
IF
O

nd
av

er
ag

e
co

st
m
et
ho

d
s
ar
e
ac

co
un

tin
g

te
ch

ni
q
ue

s
us

ed
in

m
an

ag
in
g
in
ve

nt
or
y.

K
E
Y
P
O
IN
TS

•

F
IF
O

st
an
d
s
fo
r
fi
rs
t-
in
,f
ir
st
-o
u
t,
m
ea
n
in
g
th
at
th
e
ol
d
es
t

in
ve
n
to
ry
it
em
s
ar
e
re
co
rd
ed
as
so
ld
fi
rs
t
bu
t
d
o
n
ot

n
ec
es
sa
ri
ly
m
ea
n
th
at
th
e
ex
ac
t
ol
d
es
t
p
h
ys
ic
al
ob
je
ct
h
as

be
en
tr
ac
ke
d
an
d
so
ld
.

•
L
IF
O
st
an
d
s
fo
r
la
st
-i
n
,f
ir
st
-o
u
t,
m
ea
n
in
g
th
at
th
e
m
os
t

re
ce
n
tl
y
p
ro
d
u
ce
d
it
em
s
ar
e
re
co
rd
ed
as
so
ld
fi
rs
t.

•
A
ve

ra
ge

co
st
m
et
h
od
ta
ke
s
th
e
w
ei
gh
te
d
av
er
ag
e
of
al
lu
n
it
s

av
ai
la
bl
e
fo
r
sa
le
d
u
ri
n
g
th
e
ac
co
u
n
ti
n
g
p
er
io
d
an
d
th
en
u
se
s

th
at
av
er
ag
e
co
st
to
d
et
er
m
in
e
th
e
va
lu
e
of
C
O
G
S
an
d
en
d
in
g

in
ve
n
to
ry
.

F
IF
O
,L
IF
O
,a
n
d
av
er
ag
e
co
st
m
et
h
od
s
ar
e
ac
co
u
n
ti
n
g
te
ch
n
iq
u
es

u
se
d
in
m
an
ag
in
g
in
ve
n
to
ry
in
vo

lv
in
g

th
e
am
ou
n
t
of
m
on
ey
a

co
m
p
an
y
h
as
ti
ed
u
p
w
it
h
in
in
ve
n
to
ry
of
p
ro
d
u
ce
d
go
od
s,
ra
w

m
at
er
ia
ls
,p
ar
ts
,c
om
p
on
en
ts
.T
h
es
e
m
et
h
od
s
ar
e
u
se
d
to
m
an
ag
e

as
su
m
p
ti
on
s
of
co
st
fl
ow
s
re
la
te
d
to
in
ve
n
to
ry
(F
ig
u
re
18
.1
4)
.

90
8

F
IF
O

F
IF
O
st
an
d
s
fo
r
fi
rs
t-
in
,f
ir
st
-o
u
t,
m
ea
n
in
g
th
at
th
e
ol
d
es
t
in
ve
n
to
ry

it
em
s
ar
e
re
co
rd
ed
as
so
ld
fi
rs
t
bu
t
d
o
n
ot
n
ec
es
sa
ri
ly
m
ea
n
th
at
th
e

ex
ac
t
ol
d
es
t
p
h
ys
ic
al
ob
je
ct
h
as
be
en
tr
ac
ke
d
an
d
so
ld
.T
h
is

ex
p
re
ss
io
n
d
es
cr
ib
es
th
e
p
ri
n
ci
p
le
of
a
qu
eu
e
p
ro
ce
ss
in
g
te
ch
n
iq
u
e

or
se
rv
ic
in
g
co
n
fl
ic
ti
n
g
d
em
an
d
s
by
or
d
er
in
g
p
ro
ce
ss
by
fi
rs
t
co
m
e,

fi
rs
t
se
rv
ed
(F
C
F
S)
be
h
av
io
r,
w
h
er
e
th
e
p
er
so
n
s
le
av
e
th
e
qu
eu
e
in

th
e
or
d
er
th
ey
ar
ri
ve
,o
r
w
ai
ti
n
g
on
e’
s
tu
rn
at
a
tr
af
fi
c
co
n
tr
ol
si
gn
al
.

L
IF
O

L
IF
O
st
an
d
s
fo
r
la
st
-i
n
,f
ir
st
-o
u
t,
m
ea
n
in
g
th
at
th
e
m
os
t
re
ce
n
tl
y

p
ro
d
u
ce
d
it
em
s
ar
e
re
co
rd
ed
as
so
ld
fi
rs
t.
Si
n
ce
th
e
19
70
s,
so
m
e

U
.S
.c
om
p
an
ie
s
sh
if
te
d
to
w
ar
d
s
th
e
u
se
of
L
IF
O
,w
h
ic
h
re
d
u
ce
s

th
ei
r
in
co
m
e
ta
xe
s
in
ti
m
es
of
in
fl
at
io
n
,b
u
t
w
it
h
In
te
rn
at
io
n
al

F
in
an
ci
al
R
ep
or
ti
n
g
St
an
d
ar
d
s
ba
n
n
in
g
th
e
u
se
of
L
IF
O
,m
or
e

co
m
p
an
ie
s
h
av
e
go
n
e
ba
ck
to
F
IF
O
.L
IF
O
is
on
ly
u
se
d
in
Ja
p
an
an
d

th
e
U
n
it
ed
St
at
es
,

L
IF
O
R
e
se
rv
e

T
h
e
d
if
fe
re
n
ce
be
tw
ee
n
th
e
co
st
of

an
in
ve

n
to
ry
ca
lc
u
la
te
d
u
n
d
er

th
e
F
IF
O
an
d
L
IF
O
m
et
h
od
s
is
ca
ll
ed
th
e
L
IF
O
re
se
rv
e.
T
h
is
re
se
rv
e

is
es
se
n
ti
al
ly
th
e
am
ou
n
t
by
w
h
ic
h
an
en
ti
ty
‘s
ta
xa
bl
e
in
co
m
e
h
as

be
en
d
ef
er
re
d
by
u
si
n
g
th
e
L
IF
O
m
et
h
od
.

A
ve
ra
g
e
C
o
st

A
ve
ra
ge
co
st
m
et
h
od
is
qu
it
e
st
ra
ig
h
tf
or
w
ar
d
.I
t
ta
ke
s
th
e
w
ei
gh
te
d

av
er
ag
e
of
al
lu
n
it
s
av
ai
la
bl
e
fo
r
sa
le
d
u
ri
n
g
th
e
ac
co
u
n
ti
n
g
p
er
io
d

an
d
th
en
u
se
s
th
at
av
er
ag
e
co
st
to
d
et
er
m
in
e
th
e
va
lu
e
of
C
O
G
S
an
d

en
d
in
g
in
ve
n
to
ry
.T
h
er
e
ar
e
tw
o
co
m
m
on
ly
u
se
d
av
er
ag
e
co
st

m
et
h
od
s:
Si
m
p
le
w
ei
gh
te
d
av
er
ag
e
co
st
m
et
h
od
an
d
m
ov
in
g

av
er
ag
e
co
st
m
et
h
od
.

W
e
ig
h
te
d
a
ve
ra
g
e
co
st
m
e
th
o
d
:

It
ta
ke
s
C
os
t
of
G
oo
d
s
A
va
il
ab
le
fo
r
Sa
le
an
d
d
iv
id
es
it
by
th
e
to
ta
l

am
ou
n
t
of
go
od
s
fr
om
B
eg
in
n
in
g
In
ve
n
to
ry
an
d
P
u
rc
h
as
es
.T
h
is

gi
ve
s
a

W
ei
gh

te
d
A
ve

ra
ge
C
os
t
p
er
U
n
it
.A
p
h
ys
ic
al
co
u
n
t
is
th
en

p
er
fo
rm
ed
on
th
e
en
d
in
g
in
ve
n
to
ry
to
d
et
er
m
in
e
th
e
am
ou
n
t
of

90
9

In
ve

nt
or
ie
s
U
.S
.

A
rm

y
un

it
b
ad

ge
s

fr
om

a
w
al
lo

f
m
ili
ta
ry

un
ifo

rm
ite

m
s

Fi
g
ur
e
18

.1
4

In
ve
nt
or
y

go
od
s
le
ft
.F
in
al
ly
,t
h
is
am
ou
n
t
is
m
u
lt
ip
li
ed
by
W
ei
gh
te
d
A
ve
ra
ge

C
os
t
p
er
U
n
it
to
gi
ve
an
es
ti
m
at
e
of

en
d
in
g
in
ve
n
to
ry
co
st
.

M
o
vi
n
g
a
ve
ra
g
e
co
st
m
e
th
o
d
:

A
ss
u
m
e
th
at
bo
th
B
eg
in
n
in
g
In
ve
n
to
ry
an
d
be
gi
n
n
in
g
in
ve
n
to
ry

co
st
ar
e
kn
ow
n
.F
ro
m
th
em
th
e
C
os
t
p
er
U
n
it
of
B
eg
in
n
in
g

In
ve
n
to
ry
ca
n
be
ca
lc
u
la
te
d
.D
u
ri
n
g
th
e
ye
ar
,m
u
lt
ip
le
p
u
rc
h
as
es

ar
e
m
ad
e.
E
ac
h
ti
m
e,
p
u
rc
h
as
e
co
st
s
ar
e
ad
d
ed
to
be
gi
n
n
in
g

in
ve
n
to
ry
co
st
to
ge
t
C
os
t
of
C
u
rr
en
t
In
ve
n
to
ry
.S
im
il
ar
ly
,t
h
e

n
u
m
be
r
of
u
n
it
s
bo
u
gh
t
is
ad
d
ed
to
be
gi
n
n
in
g
in
ve
n
to
ry
to
ge
t

C
u
rr
en
t
G
oo
d
s
A
va
il
ab
le
fo
r
Sa
le
.A
ft
er
ea
ch
p
u
rc
h
as
e,
C
os
t
of

C
u
rr
en
t
In
ve
n
to
ry
is
d
iv
id
ed
by
C
u
rr
en
t
G
oo
d
s
A
va
il
ab
le
fo
r
Sa
le
to

ge
t
C
u
rr
en
t
C
os
t
p
er
U
n
it
on
G
oo
d
s.

A
ls
o
d
u
ri
n
g
th
e
ye
ar
,m
u
lt
ip
le

sa
le
s
h
ap
p
en
.T
h
e
C
u
rr
en
t
G
oo
d
s
A
va
il
ab
le
fo
r
Sa
le
is
d
ed
u
ct
ed
by

th
e
am
ou
n
t
of
go
od
s
so
ld
,a
n
d
th
e
C
os
t
of
C
u
rr
en
t
In
ve
n
to
ry
is

d
ed
u
ct
ed
by
th
e
am
ou
n
t
of
go
od
s
so
ld
ti
m
es
th
e
la
te
st
(b
ef
or
e
th
is

sa
le
)
C
u
rr
en
t
C
os
t
p
er
U
n
it
on
G
oo
d
s.
T
h
is
d
ed
u
ct
ed
am
ou
n
t
is

ad
d
ed
to
C
os
t
of
G
oo
d
s
So
ld
.A
t
th
e
en
d
of
th
e
ye
ar
,t
h
e
la
st
C
os
t
p
er

U
n
it
on
G
oo
d
s,
al
on
g
w
it
h
a
p
h
ys
ic
al
co
u
n
t,
is
u
se
d
to
d
et
er
m
in
e

en
d
in
g
in
ve
n
to
ry
co
st
.

So
u
rc
e:
ht
tp
s:
//
w
w
w
.b
ou
n
d
le
ss
.c
om
/f
in
a
n
ce
/w
or
ki
n
g
-c
a
p
it
a
l-

m
a
n
a
g
em
en
t/
in
ve
n
to
ry
-m
a
n
a
g
em
en
t/
in
ve
n
to
ry
-t
ec
hn
iq
u
es
/

C
C
-B
Y
-S
A

B
ou
n
d
le
ss
is
a
n
op
en
ly
li
ce
n
se
d
ed
u
ca
ti
on
a
lr
es
ou
rc
e

A
B
C
Te
ch

ni
q
ue

Th
e
A
B
C

an
al
ys

is
is

an
in
ve

nt
or
y
ca

te
go

riz
at
io
n

te
ch

ni
q
ue

of
te
n
us

ed
in

m
at
er
ia
lm

an
ag

em
en

t
w
he

re
in

ac
cu

ra
cy

an
d
co

nt
ro
ld

ec
re
as

es
fr
om

A
to

C
.

K
E
Y
P
O
IN
TS

•
A
it
em
s:
ve
ry
ti
gh
t
co
n
tr
ol
an
d
ac
cu
ra
te
re
co
rd
s;
B
it
em
s:
le
ss

ti
gh
tl
y
co
n
tr
ol
le
d
an
d
go
od
re
co
rd
s;
C
it
em
s:
si
m
p
le
st

co
n
tr
ol
s
p
os
si
bl
e
an
d
m
in
im
al
re
co
rd
s.

•
T
h
e
A
B
C
an
al
ys
is
p
ro
vi
d
es
a
m
ec
h
an
is
m
fo
r
id
en
ti
fy
in
g
it
em
s

th
at
w
il
lh
av
e
a
si
gn
if
ic
an
t
im
p
ac
t
on
ov
er
al
li
n
ve
n
to
ry
co
st
,

w
h
il
e
al
so
p
ro
vi
d
in
g
a
m
ec
h
an
is
m
fo
r
id
en
ti
fy
in
g
d
if
fe
re
n
t

ca
te
go
ri
es
of
st
oc
k
th
at
w
il
lr
eq
u
ir
e
d
if
fe
re
n
t
m
an
ag
em
en
t

an
d
co
n
tr
ol
s.

•
T
h
e
A
B
C
an
al
ys
is
su
gg
es
ts
th
at
in
ve
n
to
ri
es
of
an
or
ga
n
iz
at
io
n

ar
e
n
ot
of
eq
u
al
va
lu
e.

T
h
e
A
B
C
an
al
ys
is
is
a
bu
si
n
es
s
te
rm
u
se
d
to
d
ef
in
e
an
in
ve
n
to
ry

ca
te
go
ri
za
ti
on
te
ch
n
iq
u
e
of
te
n
u
se
d
in
m
at
er
ia
lm
an
ag
em
en
t.
It
is

al
so
kn
ow
n
as
“S
el
ec
ti
ve
In
ve
n
to
ry
C
on
tr
ol
.”
P
ol
ic
ie
s
ba
se
d
on
A
B
C

an
al
ys
is
:

•
A
IT
E
M
S:
ve
ry
ti
gh
t
co
n
tr
ol
an
d
ac
cu
ra
te
re
co
rd
s

•
B
IT
E
M
S:
le
ss
ti
gh
tl
y
co
n
tr
ol
le
d
an
d
go
od
re
co
rd
s

91
0

•
C
IT
E
M
S:
si
m
p
le
st
co
n
tr
ol
s
p
os
si
bl
e
an
d
m
in
im
al
re
co
rd
s

T
h
e
A
B
C
an
al
ys
is
p
ro
vi
d
es
a
m
ec
h
an
is
m
fo
r
id
en
ti
fy
in
g
it
em
s
th
at

w
il
lh
av
e
a
si
gn
if
ic
an
t
im
p
ac
t
on
ov
er
al
li
n
ve
n
to
ry
co
st
,w
h
il
e
al
so

p
ro
vi
d
in
g
a
m
ec
h
an
is
m
fo
r
id
en
ti
fy
in
g
d
if
fe
re
n
t
ca
te
go
ri
es
of
st
oc
k

th
at
w
il
lr
eq
u
ir
e
d
if
fe
re
n
t
m
an
ag
em
en
t
an
d
co
n
tr
ol
s.

T
h
e
A
B
C
an
al
ys
is
su
gg
es
ts
th
at
in
ve
n
to
ri
es
of
an
or
ga
n
iz
at
io
n
ar
e

n
ot
of
eq
u
al
va
lu
e.
T
h
u
s,
th
e
in
ve
n
to
ry
is
gr
ou
p
ed
in
to
th
re
e

ca
te
go
ri
es
(A
,B
,a
n
d
C
)
in
or
d
er
of
th
ei
r
es
ti
m
at
ed
im
p
or
ta
n
ce
.

A
it
em
s
ar
e
ve
ry
im
p
or
ta
n
t
fo
r
an
or
ga
n
iz
at
io
n
.B
ec
au
se
of
th
e
h
ig
h

va
lu
e
of
th
es
e
A
it
em
s,
fr
eq
u
en
t
va
lu
e
an
al
ys
is
is
re
qu
ir
ed
.I
n

ad
d
it
io
n
to
th
at
,a
n
or
ga
n
iz
at
io
n
n
ee
d
s
to
ch
oo
se
an
ap
p
ro
p
ri
at
e

or
d
er
p
at
te
rn
(e
.g
.,
“J
u
st
–
in
–
ti
m
e
“)
to
av
oi
d
ex
ce
ss
ca
p
ac
it
y.

B
it
em
s
ar
e
im
p
or
ta
n
t,
bu
t
of
co
u
rs
e
le
ss
im
p
or
ta
n
t,
th
an
A
it
em
s

an
d
m
or
e
im
p
or
ta
n
t
th
an
C

it
em
s.

T
h
er
ef
or
e,
B
it
em
s
ar
e
in
te
rg
ro
u
p

it
em
s.

C
it
em
s
ar
e
m
ar
gi
n
al
ly
im
p
or
ta
n
t.

T
h
e
fo
ll
ow
in
g
is
an
ex
am
p
le
of
th
e
A
p
p
li
ca
ti
on
of
W
ei
gh
ed

O
p
er
at
io
n
ba
se
d
on

A
B
C
cl
as

s
in

th
e
el
ec

tr
on

ic
s
m
an

u
fa
ct
u
ri
n
g

co
m
p
an
y
w
it
h
4,
0
51
ac
ti
ve
p
ar
ts
(F
ig
u
re
18
.1
6)
.

U
si
n
g
th
is
d
is
tr
ib
u
ti
on
of
A
B
C
cl
as
s
an
d
ch
an
ge
to
ta
ln
u
m
be
r
of
th
e

p
ar
ts
to
4,
0
0
0
(F
ig
u
re
18
.1
5)
.

91
1

A
ct
ua

ld
is
tr
ib
ut
io
n
of

A
B
C
cl
as

s
in

th
e
el
ec

tr
on

ic
s
m
an

uf
ac

tu
rin

g
co

m
p
an

y
w
ith

40
51

ac
tiv

e
p
ar
ts
.

Fi
g
ur
e
18

.1
6
A
B
C
an
al
ys
is

D
is
tr
ib
ut
io
n
of

A
B
C

cl
as

Fi
g
ur
e
18

.1
5
A
B
C

te
ch
ni
q
ue
s

•
U
n
if
or
m
P
u
rc
h
as
e:
W
h
en
yo
u
ap
p
ly
eq
u
al
p
u
rc
h
as
in
g
p
ol
ic
y
to

al
l4
,0
0
0
co
m
p
on
en
ts
,e
xa
m
p
le
w
ee
kl
y
d
el
iv
er
y
an
d
re
-o
rd
er

p
oi
n
t
(s
af
et
y
st
oc
k)
of
tw
o-
w
ee
k
su
p
p
ly
as
su
m
in
g
th
at
th
er
e

ar
e
n
o
lo
t
si
ze
co
n
st
ra
in
ts
,t
h
e
fa
ct
or
y
w
il
lh
av
e
a
16
,0
0
0

d
el
iv
er
y
in
fo
u
r
w
ee
ks
an
d
th
e
av
er
ag
e
in
ve
n
to
ry
w
il
lb
e
2.
5

w
ee
ks
su
p
p
ly
.

•
W
ei
gh
ed
P
u
rc
h
as
e:
In
co
m
p
ar
is
on
,w
h
en
w
ei
gh
ed
p
u
rc
h
as
in
g

p
ol
ic
y
ap
p
li
ed
ba
se
d
on
A
B
C
cl
as
s,
ex
am
p
le
C
cl
as
s
m
on
th
ly

(e
ve
ry
fo
u
r
w
ee
ks
)
d
el
iv
er
y
w
it
h
re
-o
rd
er
p
oi
n
t
of
th
re
e-
w
ee
k

su
p
p
ly
,B
cl
as
s
B
i-
w
ee
kl
y
d
el
iv
er
y
w
it
h
re
-o
rd
er
p
oi
n
t
of
tw
o-

w
ee
k
su
p
p
ly
,A
cl
as
s
w
ee
kl
y
d
el
iv
er
y
w
it
h
re
-o
rd
er
p
oi
n
t
of

on
e-
w
ee
k
su
p
p
ly
,t
ot
al
n
u
m
be
r
of
d
el
iv
er
y
in
fo
u
r
w
ee
ks
w
il
l

be
(A
20
0
x4
=
8
0
0
)+
(B
40
0
x2
=
8
0
0
)
+
(C

34
0
0
x1
=
34
0
0
)=
50
0
0
an
d
av
er
ag
e
in
ve
n
to
ry
w
il
lb
e
(A

75
%
x1
.5
w
ee
ks
)+
(B
15
%
x3
w
ee
ks
)+
(C
10
%
x3
.5
w
ee
ks
)=
1.

92
5

w
ee
k
su
p
p
ly
.

B
y
ap
p
ly
in
g
w
ei
gh
ed
co
n
tr
ol
ba
se
d
on
A
B
C
cl
as
si
fi
ca
ti
on
,r
eq
u
ir
ed

m
an
h
ou
rs
an

d
in
ve

n
to
ry
le
ve
la
re
d
ra
st
ic
al
ly
re
d
u
ce
d
.

So
u
rc
e:
ht
tp
s:
//
w
w
w
.b
ou
n
d
le
ss
.c
om
/f
in
a
n
ce
/w
or
ki
n
g
-c
a
p
it
a
l-

m
a
n
a
g
em
en
t/
in
ve
n
to
ry
-m
a
n
a
g
em
en
t/
a
bc
-t
ec
hn
iq
u
e/

C
C
-B
Y
-S
A

B
ou
n
d
le
ss
is
a
n
op
en
ly
li
ce
n
se
d
ed
u
ca
ti
on
a
lr
es
ou
rc
e

S
ea

so
na

lP
ro
d
uc

tio
n

A
co

m
p
an

y
w
or
ki
ng

in
a
se

as
on

al
in
d
us

tr
y
sh

ou
ld

cr
ea

te
a
p
la
n
b
as

ed
on

hi
st
or
ic
al

sa
le
s
d
at
a,

or
d
er

st
oc

k
ea

rly
an

d
ha

ve
m
or
e
ca

sh
in

ha
nd

s
if
p
os

si
b
le
.

K
E
Y
P
O
IN
TS

•
In
ve
n
to
ri
es
ar
e
m
ai
n
ta
in
ed
as
bu
ff
er
s
to
m
ee
t
u
n
ce
rt
ai
n
ti
es
in

d
em
an
d
,s
u
p
p
ly
an
d
m
ov
em
en
ts
of
go
od
s.

•
A
co
m
p
an
y
w
or
ki
n
g
in
a
se
as
on
al
in
d
u
st
ry
sh
ou
ld
cr
ea
te
a

p
la
n
ba
se
d
on
h
is
to
ri
ca
ls
al
es
d
at
a
an
d
ot
h
er
re
le
va
n
t

in
fo
rm
at
io
n
.

•
C
om
p
an
ie
s
ar
e
al
so
su
p
p
os
ed
to
st
oc
k
in
ve
n
to
ry
ea
rl
y
si
n
ce

th
er
e
w
il
lb
e
ot
h
er
p
ro
d
u
ce
rs
co
m
p
et
in
g
fo
r
th
e
sa
m
e

p
ro
d
u
ct
io
n
m
at
er
ia
ls
d
u
ri
n
g
p
ea
k
p
er
io
d
.E
ar
ly
or
d
er
in
g,
in

ad
d
it
io
n
,h
el
p
s
th
e
co
m
p
an
y
ad
ju
st
it
s
in
ve
n
to
ry
d
em
an
d
if

n
ec
es
sa
ry
.

•
It
is
ad
vi
sa
bl
e
th
at
a
co
m
p
an
y
h
as
h
ea
lt
h
y
ca
sh
fl
ow
d
u
ri
n
g

se
as
on
al
p
ea
k
so
th
at
it
ca
n
or
d
er
p
ro
m
p
tl
y
an
d
ea
si
ly
.T
h
is
,

of
co
u
rs
e,
h
as
to
ta
ke
in
to
co
n
si
d
er
at
io
n
th
e
op
p
or
tu
n
it
y
co
st

of
h
ol
d
in
g
m
on
ey
.

In
ve
n
to
ry
m
an
ag
em
en
t
is
p
ri
m
ar
il
y
ab
ou
t
sp
ec
if
yi
n
g
th
e
si
ze
an
d

p
la
ce
m
en
t
of
st
oc
ke
d
go
od
s
to
p
ro
te
ct
th
e
re
gu
la
r
an
d
p
la
n
n
ed

co
u
rs
e
of
p
ro
d
u
ct
io
n
ag
ai
n
st
th
e
ra
n
d
om
d
is
tu
rb
an
ce
of
ru
n
n
in
g
ou
t

m
at
er
ia
ls
or
go
od
s.

91
2

S
e
a
so
n
a
l
P
ro
d
u
ct
io
n

M
an
y
ec
on
om
ic
p
h
en
om
en
a
h
av
e
se
as
on
al
cy
cl
es
,s
u
ch
as

ag
ri
cu
lt
u
ra
lp
ro
d
u
ct
io
n
an
d
co
n
su
m
er
co
n
su
m
p
ti
on
.O
ft
en

m
an
ag
er
s
h
av
e
to
m
ak
e
d
ec
is
io
n
s
ab
ou
t
in
ve
n
to
ry
le
ve
lo
ve
r
a
ve
ry

li
m
it
ed
p
er
io
d
.T
h
is
is
th
e
ca
se
,f
or
ex
am
p
le
w
it
h
se
as
on
al
go
od
s

su
ch
as
C
h
ri
st
m
as
ca
rd
s
th
at
sh
ou
ld
sa
ti
sf
y
al
ld
em
an
d
s
in

D
ec
em
be
r,
bu
t
ca
rd
s
le
ft
in
Ja
n
u
ar
y
h
av
e
li
tt
le
or
n
o
va
lu
e.
If
a

co
m
p
an
y
bu
ys
to
o
m
an
y
p
ap
er
s
it
is
le
ft
w
it
h
u
n
so
ld
p
ap
er
s
th
at

h
av
e
n
o
va
lu
e
af
te
r
th
e
se
as
on
al
p
ea
k;
if
it
bu
ys
to
o
fe
w
p
ap
er
s
it
h
as

lo
st
th
e
op
p
or
tu
n
it
y
of
m
ak
in
g
a
h
ig
h
er
p
ro
fi
t.
A
s
a
re
su
lt
,i
t
is

n
ec
es
sa
ry
to
tr
ea
t
se
as
on
al
it
y
se
ri
ou
sl
y
in
fo
re
ca
st
in
g
p
ra
ct
ic
e
fo
r

in
ve
n
to
ry
co
n
tr
ol
.I
n
ve
n
to
ri
es
ar
e
m
ai
n
ta
in
ed
as
bu
ff
er
s
to
m
ee
t

u
n
ce
rt
ai
n
ti
es
in
d
em
an
d
,s
u
p
p
ly
an
d
m
ov
em
en
ts
of
go
od
s
(F
ig
u
re

18
.1
7)
.

A
co
m
p
an
y
op
er
at
in
g
in
a
se
as
on
al
in
d
u
st
ry
sh
ou
ld
cr
ea
te
a
p
la
n

ba
se
d
on
h
is
to
ri
ca
ls
al
es
d
at
a
an
d
ot
h
er
re
le
va
n
t
in
fo
rm
at
io
n
.

In
ve
n
to
ry
le
ve
ls
h
ou
ld
al
w
ay
s
be
d
et
er
m
in
ed
su
ch
th
at
th
e
d
em
an
d

fo
r
p
ro
d
u
ct
io
n
m
at
er
ia
ls
is
m
et
al
lt
h
e
ti
m
e.
T
h
is
sh
ou
ld
ta
ke
in
to

ac
co
u
n
t
th
e
la
g
ti
m
e
in
th
e
su
p
p
ly
ch
ai
n
,f
ro
m
su
p
p
li
er
s
to
en
d
u
se
rs

at
ev
er
y
st
ag
e.
In
es
se
n
ce
,t
h
e
co
m
p
an
y
sh
ou
ld
m
ai
n
ta
in
ce
rt
ai
n

am
ou
n
ts
of
in
ve
n
to
ry
th
at
w
ou
ld
be
su
ff
ic
ie
n
t
at
ev
er
y
gi
ve
n
p
oi
n
t.

C
om
p
an
ie
s
ar
e
al
so
su
p
p
os
ed
to
st
oc
k
in
ve
n
to
ry
ea
rl
y
si
n
ce
th
er
e

w
il
lb
e
ot
h
er
p
ro
d
u
ce
rs
co
m
p
et
in
g
fo
r
th
e
sa
m
e
p
ro
d
u
ct
io
n

m
at
er
ia
ls
d
u
ri
n
g
p
ea
k
p
er
io
d
.E
ar
ly
or
d
er
in
g,

in
ad

d
it
io
n
,h
el
p
s
th
e

co
m
p
an
y
ad
ju
st
it
s
in
ve
n
to
ry
d
em
an
d
if
n
ec
es
sa
ry
.

It
is
ad
vi
sa
bl
e
th
at
a
co
m
p
an
y
h
as
h
ea
lt
h
y
ca
sh
fl
ow
d
u
ri
n
g
se
as
on
al

p
ea
k
so
th
at
it
ca
n
or
d
er
p
ro
m
p
tl
y
an
d
ea
si
ly
.T
h
is
,o
fc
ou
rs
e,
h
as
to

ta
ke
in
to
co
n
si
d
er
at
io
n
th
e
op
p
or
tu
n
it
y
co
st
of
h
ol
d
in
g
m
on
ey
.

So
u
rc
e:
ht
tp
s:
//
w
w
w
.b
ou
n
d
le
ss
.c
om
/f
in
a
n
ce
/w
or
ki
n
g
-c
a
p
it
a
l-

m
a
n
a
g
em
en
t/
in
ve
n
to
ry
-m
a
n
a
g
em
en
t/
se
a
so
n
a
l-
p
ro
d
u
ct
io
n
/

C
C
-B
Y
-S
A

B
ou
n
d
le
ss
is
a
n
op
en
ly
li
ce
n
se
d
ed
u
ca
ti
on
a
lr
es
ou
rc
e

91
3

Fe
m
al
e
cl
er
k
d
oi
ng

in
ve

nt
or
y
w
or
k

in
g

a
ha

nd
he

ld
co

m
p
ut
er

in
a

Te
sc

o
Lo

tu
s

p
er
m
ar
ke

t
in

S
ak

on
N
ak

ho
n,

Th
ai
la
nd

Fi
g
ur
e
18

.1
7
In
ve

nt
or
y
m
an

ag
em

en
t

Im
p
ac

t
of

In
a

tio
n

H
ig
h
in
a

tio
n
en

co
ur
ag

es
co

m
p
an

ie
s
to

ke
ep

a
hi
gh

le
ve

lo
fi
nv

en
to
rie

K
E
Y
P
O
IN
TS

•
In
fl
at
io
n
is
a
ri
se
in
th
e
ge
n
er
al
le
ve
lo
fp
ri
ce
s
of
go
od
s
an
d

se
rv
ic
es
in
an
ec
on
om
y
ov
er
a
p
er
io
d
of
ti
m
e.
It
re
fl
ec
ts
an

er
os
io
n
in
th
e
p
u
rc
h
as
in
g
p
ow
er
of
m
on
ey
.

•
If
in
fl
at
io
n
is
ra
p
id
en
ou
gh
,s
h
or
ta
ge
s
of
go
od
s
as
co
n
su
m
er
s

be
gi
n
h
oa
rd
in
g
ou
t
of
co
n
ce
rn
th
at
p
ri
ce
s
w
il
li
n
cr
ea
se
in
th
e

fu
tu
re
.T
h
er
ef
or
e,
h
ig
h
in
fl
at
io
n
en
co
u
ra
ge
s
co
m
p
an
ie
s
to

ke
ep
a
h
ig
h
le
ve
lo
fi
n
ve
n
to
ri
es
.

•
T
h
e
M
u
n
d
el
l-
T
ob
in
ef
fe
ct
al
so
su
gg
es
ts
a
ri
se
in
in
ve
n
to
ry

le
ve
li
n
ca
se
of
h
ig
h
in
fl
at
io
n
.

In
fl
at
io
n
is
a
ri
se
in
th
e
ge
n
er
al
le
ve
lo
fp
ri
ce
s
of
go
od
s
an
d
se
rv
ic
es

in
an
ec
on
om
y
ov
er
a
p
er
io
d
of
ti
m
e.
W
h
en
th
e
ge
n
er
al
p
ri
ce
le
ve
l

ri
se
s,
ea
ch
u
n
it
of
cu
rr
en
cy
bu
ys
fe
w
er
go
od
s
an
d
se
rv
ic
es
.

C
on
se
qu
en
tl
y,
in
fl
at
io
n
al
so
re
fl
ec
ts
an
er
os
io
n
in
th
e
p
u
rc
h
as
in
g

p
ow
er
of
m
on
ey
–
a
lo
ss
of
re
al
va
lu
e
in
th
e
in
te
rn
al
m
ed
iu
m
of

ex
ch
an
ge
an
d
u
n
it
of
ac
co
u
n
t
in
th
e
ec
on
om
y.

In
fl
at
io
n
‘s
ef
fe
ct
s
on
an
ec
on
om
y
ar
e
va
ri
ou
s
an
d
ca
n
be

si
m
u
lt
an
eo
u
sl
y
p
os
it
iv
e
an
d
n
eg
at
iv
e.
N
eg
at
iv
e
ef
fe
ct
s
of
in
fl
at
io
n

in
cl
u
d
e
an
in
cr
ea
se
in
th
e
op
p
or
tu
n
it
y
co
st
of
h
ol
d
in
g
m
on
ey
;

u
n
ce
rt
ai
n
ty
ov
er
fu
tu
re
in
fl
at
io
n
w
h
ic
h
m
ay
d
is
co
u
ra
ge
in
ve
st
m
en
t

an
d
sa
vi
n
gs
;a
n
d
if
in
fl
at
io
n
is
ra
p
id
en
ou
gh
,s
h
or
ta
ge
s
of
go
od
s
as

co
n
su
m
er
s
be
gi
n
h
oa
rd
in
g
ou
t
of
co
n
ce
rn
th
at
p
ri
ce
s
w
il
li
n
cr
ea
se
in

th
e
fu
tu
re
.T
h
er
ef
or
e,
h
ig
h
in
fl
at
io
n
en
co
u
ra
ge
s
co
m
p
an
ie
s
to
ke
ep

a
h
ig
h
le
ve
lo
fi
n
ve
n
to
ri
es
(F
ig
u
re
18

.1
8

T
h
e
N
ob
el
la
u
re
at
e
R
ob
er
t
M
u
n
d
el
ln
ot
ed
th
at
m
od
er
at
e
in
fl
at
io
n

w
ou
ld
in
d
u
ce
sa
ve
rs
to
su
bs
ti
tu
te
le
n
d
in
g
fo
r
so
m
e
m
on
ey
h
ol
d
in
g

as
a
m
ea
n
s
to
fi
n
an
ce
fu
tu
re
sp
en
d
in
g.
T
h
at
su
bs
ti
tu
ti
on
w
ou
ld

ca
u
se
m
ar
ke
t
cl
ea
ri
n
g
re
al
in
te
re
st
ra
te
s
to
fa
ll
.N
ob
el
la
u
re
at
e

Ja
m
es
T
ob
in
n
ot
ed
th
at
m
od
er
at
e
in
fl
at
io
n
w
ou
ld
ca
u
se
bu
si
n
es
se
s

to
su
bs
ti
tu

te
in
ve

st
m
en
t
in
p
h
ys
ic
a
l
ca
p
it
a
l
(p
la
n
t,
eq
u
ip
m
en
t,

an
d
in
ve
n
to
ri
es
)
fo
r
m
on
ey
ba
la
n
ce
s
in
th
ei
r
as
se
t
p
or
tf
ol
io
s.
T
h
at

91
4

In
a

tio
n
in

Fr
an

ce
in

20
02

Fi
g
ur
e
18

.1
8

In
a
tio
n

su
bs
ti
tu
ti
on
w
ou
ld
m
ea
n
ch
oo
si
n
g
th
e
m
ak
in
g
of
in
ve
st
m
en
ts
w
it
h

lo
w
er
ra
te
s
of
re
al
re
tu
rn
.(
T
h
e
ra
te
s
of
re
tu
rn
ar
e
lo
w
er
,b
ec
au
se

th
e
in
ve
st
m
en
ts
w
it
h
h
ig
h
er
ra
te
s
of
re
tu
rn
w
er
e
al
re
ad
y
be
in
g

m
ad
e
be
fo
re
.)
T
o
p
u
t
it
in
a
w
or
d
,c
om
p
an
ie
s
p
u
rc
h
as
e
m
or
e

in
ve
n
to
ri
es
in
ca
se
of
h
ig
h
in
fl
at
io
n
.T
h
e
tw
o
re
la
te
d
ef
fe
ct
s
ar
e

kn
ow
n
as
th
e
M
u
n
d
el
l-
T
ob
in
ef
fe
ct
.U
n
le
ss
th
e
ec
on
om
y
is
al
re
ad
y

ov
er
-i
n
ve
st
in
g
ac
co
rd
in
g
to
m
od
el
s
of
ec
on
om
ic
gr
ow
th
th
eo
ry
,t
h
at

ex
tr
a
in
ve
st
m
en
t
re
su
lt
in
g
fr
om
th
e
ef
fe
ct
w
ou
ld
be
se
en
as
p
os
it
iv
e.

So
u
rc
e:
ht
tp
s:
//
w
w
w
.b
ou
n
d
le
ss
.c
om
/f
in
a
n
ce
/w
or
ki
n
g
-c
a
p
it
a
l-

m
a
n
a
g
em
en
t/
in
ve
n
to
ry
-m
a
n
a
g
em
en
t/
im
p
a
ct
-o
f-
in
fl
a
ti
on
/

C
C
-B
Y
-S
A

B
ou
n
d
le
ss
is
a
n
op
en
ly
li
ce
n
se
d
ed
u
ca
ti
on
a
lr
es
ou
rc
e

In
ve

nt
or
y
C
os

ts
In
ve

nt
or
y
co

st
s
d
ep

en
d
s
on

m
et
ho

d
s
us

ed
,w

hi
ch

in
cl
ud

e
S
p
ec

i
c
Id
en

ti
ca

tio
n,

W
ei
gh

te
d
A
ve

ra
ge

C
os

t,
M
ov

in
g-
A
ve

ra
ge

C
os

t,
FI
FO

,a
nd

LI
FO

K
E
Y
P
O
IN
TS

•
T
h
er
e
ar
e,
in
fa
ct
,s
o
m
an
y
th
in
gs
th
at
ca
n
va
ry
h
id
d
en
u
n
d
er

th
is
ap
p
ea
ra
n
ce
of
si
m
p
li
ci
ty
th
at
a
va
ri
et
y
of
‘a
d
ju
st
in
g’

as
su
m
p
ti
on
s

m
ay
be
u
se
d
.T
h
es
e
in
cl
u
d
e:

Sp
ec
if
ic

Id
en
ti
fi
ca
ti
on
,W
ei
gh
te
d
A
ve
ra
ge
C
os
t,
M
ov
in
g-
A
ve
ra
ge
C
os
t,

F
IF
O
,a
n
d
L
IF
O
.

•
Sp
ec
if
ic
id
en
ti
fi
ca
ti
on
re
qu
ir
es
a
d
et
ai
le
d
p
h
ys
ic
al
co
u
n
t,
so

th
at
th
e
co
m
p
an
y
kn
ow
s
ex
ac
tl
y
h
ow
m
an
y
of
ea
ch
go
od
s

br
ou
gh
t
on
sp
ec
if
ic
d
at
es
re
m
ai
n
ed
at
ye
ar
en
d
in
ve
n
to
ry
.

•
W
ei
gh
te
d
A
ve
ra
ge
C
os
t
is
al
so
kn
ow
n
as
A
V
C
O
.I
t
ta
ke
s
C
os
t

of
G
oo
d
s
A
va
il
ab
le
fo
r
Sa
le
an
d
d
iv
id
es
it
by
th
e
to
ta
la
m
ou
n
t

of
go
od
s
fr
om
B
eg
in
n
in
g
In
ve
n
to
ry
an
d
P
u
rc
h
as
es
.

•
M
ov
in
g-
A
ve
ra
ge
(U
n
it
)
C
os
t
is
a
m
et
h
od
of
ca
lc
u
la
ti
n
g

E
n
d
in
g
In
ve
n
to
ry
co
st
.A
ss
u
m
e
th
at
bo
th
B
eg
in
n
in
g

In
ve
n
to
ry
an
d
be
gi
n
n
in
g
in
ve
n
to
ry
co
st
ar
e
kn
ow
n
.F
ro
m

th
em
th
e
C
os
t
p
er
U
n
it
of
B
eg
in
n
in
g
In
ve
n
to
ry
ca
n
be

ca
lc
u
la
te
d
.

91
5

K
E
Y
P
O
IN
TS

(c
on
t.
)

•
F
IF
O
st
an
d
s
fo
r
fi
rs
t-
in
,f
ir
st
-o
u
t,
m
ea
n
in
g
th
at
th
e
ol
d
es
t

in
ve
n
to
ry
it
em
s
ar
e
re
co
rd
ed
as
so
ld
fi
rs
t,
bu
t
d
o
n
ot

n
ec
es
sa
ri
ly
m
ea
n
th
at
th
e
ex
ac
t
ol
d
es
t
p
h
ys
ic
al
ob
je
ct
h
as

be
en
tr
ac
ke
d
an
d
so
ld
.

•
L
IF
O
st
an
d
s
fo
r
la
st
-i
n
,f
ir
st
-o
u
t,
m
ea
n
in
g
th
at
th
e
m
os
t

re
ce
n
tl
y
p
ro
d
u
ce
d
it
em
s
ar
e
re
co
rd
ed
as
so
ld
fi
rs
t.

In
ve
n
to
ry
m
an
ag
em
en
t
is
p
ri
m
ar
il
y
ab
ou
t
sp
ec
if
yi
n
g
th
e
sh
ap
e
an
d

p
er
ce
n
ta
ge
of
st
oc
ke
d
go
od
s.
It
is
re
qu
ir
ed
at
d
if
fe
re
n
t
lo
ca
ti
on
s

w
it
h
in
a
fa
ci
li
ty
or
w
it
h
in
m
an
y
lo
ca
ti
on
s
of
a
su
p
p
ly
n
et
w
or
k
to

p
re
ce
d
e
th
e
re
gu
la
r
an
d
p
la
n
n
ed
co
u
rs
e
of
p
ro
d
u
ct
io
n
an
d
st
oc
k
of

m
at
er
ia
ls
.

In
ve
n
to
ry
m
an
ag
em
en
t
in
vo
lv
es
a
re
ta
il
er
se
ek
in
g
to
ac
qu
ir
e
an
d

m
ai
n
ta
in
a
p
ro
p
er
m
er
ch
an
d
is
e
as
so
rt
m
en
t
w
h
il
e
or
d
er
in
g,

sh
ip
p
in
g,
h
an
d
li
n
g,
an
d
re
la
te
d
co
st
s
ar
e
ke
p
t
in
ch
ec
k.
It
al
so

in
vo
lv
es
sy
st
em
s
an
d
p
ro
ce
ss
es
th
at
id
en
ti
fy
in
ve
n
to
ry

re
qu
ir
em
en
ts
,s
et
ta
rg
et
s,
p
ro
vi
d
e
re
p
le
n
is
h
m
en
t
te
ch
n
iq
u
es
,r
ep
or
t

ac
tu
al
an
d
p
ro
je
ct
ed
in
ve
n
to
ry
st
at
u
s,
an
d
h
an
d
le
al
lf
u
n
ct
io
n
s

re
la
te
d
to
th
e
tr
ac
ki
n
g
an
d
m
an
ag
em
en
t
of
m
at
er
ia
l.
T
h
is
w
ou
ld

in
cl
u
d
e
th
e
m
on
it
or
in
g
of
m
at
er
ia
lm
ov
ed
in
to
an
d
ou
t
of
st
oc
kr
oo
m

lo
ca
ti
on
s
an
d
th
e
re
co
n
ci
li
n
g
of
th
e
in
ve
n
to
ry
ba
la
n
ce
s.
It
al
so
m
ay

in
cl
u
d
e
A
B
C
an
al
ys
is
,l
ot
tr
ac
ki
n
g,
cy
cl
e
co
u
n
ti
n
g
su
p
p
or
t,
et
c.

M
an
ag
em
en
t
of
th
e
in
ve
n
to
ri
es
,w
it
h
th
e
p
ri
m
ar
y
ob
je
ct
iv
e
of

d
et
er
m
in
in
g/
co
n
tr
ol
li
n
g
st
oc
k
le
ve
ls
w
it
h
in
th
e
p
h
ys
ic
al

d
is
tr
ib
u
ti
on
sy
st
em
,f
u
n
ct
io
n
s
to
ba
la
n
ce
th
e
n
ee
d
fo
r
p
ro
d
u
ct

av
ai
la
bi
li
ty
ag
ai
n
st
th
e
n
ee
d
fo
r
m
in
im
iz
in
g
st
oc
k
h
ol
d
in
g
an
d

h
an
d
li
n
g
co
st
s
(F
ig
u
re
18
.1
9)
.

T
h
er
e
ar
e,
in
fa
ct
,s
o
m
an
y
th
in
gs
th
at
ca
n
va
ry
h
id
d
en
u
n
d
er
th
is

ap
p
ea
ra
n
ce
of
si
m
p
li
ci
ty
th
at
a
va
ri
et
y
of
‘a
d
ju
st
in
g’
as
su
m
p
ti
on
s

m
ay
be
u
se
d
.T
h
es
e
in
cl
u
d
e:

S
p
e
ci
fi
c
Id
e
n
ti
fi
ca
ti
o
n

Sp
ec
if
ic
id
en
ti
fi
ca
ti
on
is
a
m
et
h
od
of
fi
n
d
in
g
ou
t
en
d
in
g
in
ve
n
to
ry

co
st
.I
t
re
qu
ir
es
a
d
et
ai
le
d
p
h
ys
ic
al
co
u
n
t,
so
th
at
th
e
co
m
p
an
y

kn
ow
s
ex
ac
tl
y
h
ow
m
an
y
of
ea
ch
go
od
s
br
ou
gh
t
on
sp
ec
if
ic
d
at
es

91
6

Th
e
in
ve

nt
or
y
co

st
s

d
ep

en
d
on

w
hi
ch

m
et
ho

d
is
us

ed
.

Fi
g
ur
e
18

.1
9

In
ve
nt
or
y

re
m
ai
n
ed
at
th
e
ye
ar
en
d
in
ve
n
to
ry
.W
h
en
th
is
in
fo
rm
at
io
n
is
fo
u
n
d
,

th
e
am
ou
n
t
of
go
od
s
is
m
u
lt
ip
li
ed
by
th
ei
r
p
u
rc
h
as
e
co
st
at
th
ei
r

p
u
rc
h
as
e
d
at
e,
to
ge
t
a
n
u
m
be
r
fo
r
th
e
en
d
in
g
in
ve
n
to
ry
co
st
.

T
h
is
m
et
h
od
is
al
so
a
ve
ry
h
ar
d
to
u
se
on
in
te
rc
h
an
ge
ab
le
go
od
s.

F
or
ex
am
p
le
,i
t
is
h
ar
d
to
re
la
te
sh
ip
p
in
g
an
d
st
or
ag
e
co
st
s
to
a

sp
ec
if
ic
in
ve
n
to
ry
it
em
.T
h
es
e
n
u
m
be
r
w
il
ln
ee
d
to
be
es
ti
m
at
ed
,

th
er
ef
or
e
re
d
u
ci
n
g
th
e
sp
ec
if
ic
id
en
ti
fi
ca
ti
on
‘s
be
n
ef
it
of
be
in
g

ex
tr
em
el
y
sp
ec
if
ic
.

W
e
ig
h
te
d
A
ve
ra
g
e
C
o
st

W
ei
gh
te
d
A
ve
ra
ge
C
os
t
is
a
m
et
h
od
of
ca
lc
u
la
ti
n
g
E
n
d
in
g
In
ve
n
to
ry

co
st
.I
t
is
al
so
kn
ow
n
as
A
V
C
O
.I
t
ta
ke
s
C
os
t
of
G
oo
d
s
A
va
il
ab
le
fo
r

Sa
le
an
d
d
iv
id
es
it
by
th
e
to
ta
la
m
ou
n
t
of
go
od
s
fr
om
B
eg
in
n
in
g

In
ve
n
to
ry
an
d
P
u
rc
h
as
es
.T
h
is
gi
ve
s
a
W
ei
gh
te
d
A
ve
ra
ge
C
os
t
p
er

U
n
it
.A
p
h
ys
ic
al
co
u
n
t
is
th
en
p
er
fo
rm
ed
on
th
e
en
d
in
g
in
ve
n
to
ry
to

d
et
er
m
in
e
th
e
am
ou
n
t
of
go
od
s
le
ft
.F
in
al
ly
,t
h
is
am
ou
n
t
is

m
u
lt
ip
li
ed
by
W
ei
gh
te
d
A
ve
ra
ge
C
os
t
p
er
U
n
it
to
gi
ve
an
es
ti
m
at
e
of

en
d
in
g
in
ve
n
to
ry
co
st
.

M
o
vi
n
g
-A
ve
ra
g
e
C
o
st

M
ov
in
g-
A
ve
ra
ge
(U
n
it
)
C
os
t
is
a
m
et
h
od
of
ca
lc
u
la
ti
n
g
E
n
d
in
g

In
ve
n
to
ry
co
st
.A
ss
u
m
e
th
at
bo
th
B
eg
in
n
in
g
In
ve
n
to
ry
an
d

be
gi
n
n
in
g
in
ve
n
to
ry
co
st
ar
e
kn
ow
n
.F
ro
m
th
em
th
e
C
os
t
p
er
U
n
it

of
B
eg
in
n
in
g
In
ve
n
to
ry
ca
n
be
ca
lc
u
la
te
d
.D
u
ri
n
g
th
e
ye
ar
,m
u
lt
ip
le

p
u
rc
h
as
es
ar
e
m
ad
e.
E
ac
h
ti
m
e,
p
u
rc
h
as
e
co
st
s
ar
e
ad
d
ed
to

be
gi
n
n
in
g
in
ve
n
to
ry
co
st
to
ge
t
C
os
t
of
C
u
rr
en
t
In
ve
n
to
ry
.S
im
il
ar
ly
,

th
e
n
u
m
be
r
of
u
n
it
s
bo
u
gh
t
is
ad
d
ed
to
be
gi
n
n
in
g
in
ve
n
to
ry
to
ge
t

C
u
rr
en
t
G
oo
d
s
A
va
il
ab
le
fo
r
Sa
le
.A
ft
er
ea
ch
p
u
rc
h
as
e,
C
os
t
of

C
u
rr
en
t
In
ve
n
to
ry
is
d
iv
id
ed
by
C
u
rr
en
t
G
oo
d
s
A
va
il
ab
le
fo
r
Sa
le
to

ge
t
C
u
rr
en
t
C
os
t
p
er
U
n
it
on
G
oo
d
s.

A
ls
o
d
u
ri
n
g
th
e
ye
ar
,m
u
lt
ip
le
sa
le
s
h
ap
p
en
.T
h
e
C
u
rr
en
t
G
oo
d
s

A
va
il
ab
le
fo
r
Sa
le
is
d
ed
u
ct
ed
by
th
e
am
ou
n
t
of
go
od
s
so
ld
.T
h
e
C
os
t

of
C
u
rr
en
t
In
ve
n
to
ry
is
d
ed
u
ct
ed
by
th
e
am
ou
n
t
of
go
od
s
so
ld
ti
m
es

th
e
la
te
st
(b
ef
or
e
th
is
sa
le
)
C
u
rr
en
t
C
os
t
p
er
U
n
it
on
G
oo
d
s.
T
h
is

d
ed
u
ct
ed
am
ou
n
t
is
ad
d
ed
to
C
os
t
of
G
oo
d
s
So
ld
.

A
t
th
e
en
d
of
th
e
ye
ar
,t
h
e
la
st
C
os
t
p
er
U
n
it
on
G
oo
d
s,
al
on
g
w
it
h
a

p
h
ys
ic
al
co
u
n
t,
is
u
se
d
to
d
et
er
m
in
e
en
d
in
g
in
ve
n
to
ry
co
st
.

F
IF
O
a
n
d
L
IF
O

F
IF
O
st
an
d
s
fo
r
fi
rs
t-
in
,f
ir
st
-o
u
t,
m
ea
n
in
g
th
at
th
e
ol
d
es
t
in
ve
n
to
ry

it
em
s
ar
e
re
co
rd
ed
as
so
ld
fi
rs
t,
bu
t
d
o
n
ot
n
ec
es
sa
ri
ly
m
ea
n
th
at

th
e
ex
ac
t
ol
d
es
t
p
h
ys
ic
al
ob
je
ct
h
as
be
en
tr
ac
ke
d
an
d
so
ld
.

L
IF
O
st
an
d
s
fo
r
la
st
-i
n
,f
ir
st
-o
u
t,
m
ea
n
in
g
th
at
th
e
m
os
t
re
ce
n
tl
y

p
ro
d
u
ce
d
it
em
s
ar
e
re
co
rd
ed
as
so
ld
fi
rs
t.
Si
n
ce
th
e
19
70
‘s
,s
om
e

U
.S
.c
om
p
an
ie
s
sh
if
te
d
to
w
ar
d
s
th
e
u
se
of
L
IF
O
,w
h
ic
h
re
d
u
ce
s

th
ei
r
in
co
m
e
ta
xe
s
in
ti
m
es
of
in
fl
at
io
n
.H
ow
ev
er
,w
it
h

In
te
rn
at
io
n
al
F
in
an
ci
al
R
ep
or
ti
n
g
St
an
d
ar
d
s
ba
n
n
in
g
th
e
u
se
of

91
7

L
IF
O
,m
or
e
co
m
p
an
ie
s
h
av
e
go
n
e
ba
ck
to
F
IF
O
.L
IF
O
is
on
ly
u
se
d

in
Ja
p
an
an
d
th
e
U
.S
.

T
h
e
d
if
fe
re
n
ce
be
tw
ee
n
th
e
co
st
of
an
in
ve
n
to
ry
ca
lc
u
la
te
d
u
n
d
er

th
e
F
IF
O
an
d
L
IF
O
m
et
h
od
s
is
ca
ll
ed
th
e
L
IF
O
re
se
rv
e.
T
h
is
re
se
rv
e

is
es
se
n
ti
al
ly
th
e
am
ou
n
t
by
w
h
ic
h
an
en
ti
ty
‘s
ta
xa
bl
e
in
co
m
e
h
as

be
en
d
ef
er
re
d
by
u
si
n
g
th
e
L
IF
O
m
et
h
od
.

So
u
rc
e:
ht
tp
s:
//
w
w
w
.b
ou
n
d
le
ss
.c
om
/f
in
a
n
ce
/w
or
ki
n
g
-c
a
p
it
a
l-

m
a
n
a
g
em
en
t/
in
ve
n
to
ry
-m
a
n
a
g
em
en
t/
in
ve
n
to
ry
-c
os
ts
/

C
C
-B
Y
-S
A

B
ou
n
d
le
ss
is
a
n
op
en
ly
li
ce
n
se
d
ed
u
ca
ti
on
a
lr
es
ou
rc
e

E
co

no
m
ic

O
rd
er

Q
ua

nt
ity

Te
ch

ni
q
ue

E
co

no
m
ic

or
d
er

q
ua

nt
ity

is
th
e
or
d
er

q
ua

nt
ity

th
at

m
in
im

iz
es

to
ta
li
nv

en
to
ry

ld
in
g
co

st
s
an

d
or
d
er
in
g

co
st
s:

Q
*

=
(2D

S
H

)1 2 .

K
E
Y
P
O
IN
TS

•
E
co
n
om
ic
or
d
er
qu
an
ti
ty
is
th
e
or
d
er
qu
an
ti
ty
th
at
m
in
im
iz
es

to
ta
li
n
ve
n
to
ry
h
ol
d
in
g
co
st
s
an
d
or
d
er
in
g
co
st
s.

•

E
O
Q

d
et
er
m
in
es
th
e
op
ti
m
al
n
u
m
be
r
of
u
n
it
s
to
m
in
im
iz
e
th
e

to
ta
lc
os
t
as
so
ci
at
ed
w
it
h
th
e
p
u
rc
h
as
e,
d
el
iv
er
y,
an
d
st
or
ag
e

of
th
e
p
ro
d
u
ct
.

•
Q
*
=
(2
D
S/
H
)^
1/
2
w
h
er
e
Q
=
or
d
er
qu
an
ti
ty
,Q
*=
op
ti
m
al

or
d
er
qu
an
ti
ty
,D
=
an
n
u
al
d
em
an
d
qu
an
ti
ty
,S
=
fi
xe
d
co
st

p
er
or
d
er
,H
=
an
n
u
al
h
ol
d
in
g
co
st
p
er
u
n
it
.

E
co
n
om
ic
or
d
er
qu
an
ti
ty
is
th
e
or
d
er
qu
an
ti
ty
th
at
m
in
im
iz
es
to
ta
l

in
ve
n
to
ry
h
ol
d
in
g
co
st
s
an
d
or
d
er
in
g
co
st
s.
It
is
on
e
of
th
e
ol
d
es
t

cl
as
si
ca
lp
ro
d
u
ct
io
n
sc
h
ed
u
li
n
g
m
od
el
s.
T
h
e
fr
am
ew
or
k
u
se
d
to

d
et
er
m
in
e
th
is
or
d
er
qu
an
ti
ty
is
al
so
kn
ow
n
as
“B
ar
ab
as
E
O
Q

M
od
el
”
or
“B
ar
ab
as
F
or
m
u
la
.”
T
h
e
m
od
el
w
as
d
ev
el
op
ed
by
F
or
d

91
8

W
.H
ar
ri
s
in
19
13
,b
u
t
R
.H
.W
il
so
n
,a
co
n
su
lt
an
t
w
h
o
ap
p
li
ed
it

ex
te
n
si
ve
ly
,i
s
gi
ve
n
cr
ed
it
fo
r
h
is
in
-d
ep
th
an
al
ys
is
.

W
e
w
an
t
to
d
et
er
m
in
e
th
e
op
ti
m
al
n
u
m
be
r
of
u
n
it
s
to
or
d
er
so
th
at

w
e
m
in
im
iz
e
th
e
to
ta
lc
os
t
as
so
ci
at
ed
w
it
h
th
e
p
u
rc
h
as
e,
d
el
iv
er
y,

an
d
st
or
ag
e
of
th
e
p
ro
d
u
ct
.T
h
e
re
qu
ir
ed
p
ar
am
et
er
s
to
th
e
so
lu
ti
on

ar
e
th
e
to
ta
ld
em
an
d
fo
r
th
e
ye
ar
,t
h
e
p
u
rc
h
as
e
co
st
fo
r
ea
ch
it
em
,

th
e
fi
xe
d
co
st
to
p
la
ce
th
e
or
d
er
,a
n
d
th
e
st
or
ag
e
co
st
fo
r
ea
ch
it
em

p
er
ye
ar
.N
ot
e
th
at
th
e
n
u
m
be
r
of
ti
m
es
an
or
d
er
is
p
la
ce
d
w
il
la
ls
o

af
fe
ct
th
e
to
ta
lc
os
t,
th
ou
gh
th
is
n
u
m
be
r
ca
n
be
d
et
er
m
in
ed
fr
om

th
e
ot
h
er
p
ar
am
et
er
s.

U
n
d
er
ly
in
g
as
su
m
p
ti
on
s

ar
e:

•
T
h
e
or
d
er
in
g
co
st
is
co
n
st
an
t.

•
T
h
e
ra
te
of
d
em
an
d
is
kn
ow
n
,a
n
d
sp
re
ad
ev
en
ly
th
ro
u
gh
ou
t

th
e
ye
ar
.

•
T
h
e
le
ad
ti
m
e
is
fi
xe
d
.

•
T
h
e
p
u
rc
h
as
e
p
ri
ce
of
th
e
it
em
is
co
n
st
an
t
(i
.e
.,
n
o
d
is
co
u
n
t
is

av
ai
la
bl
e)
.

•
T
h
e
re
p
le
n
is
h
m
en
t
is
m
ad
e
in
st
an
ta
n
eo
u
sl
y;
th
e
w
h
ol
e
ba
tc
h

is
d
el
iv
er
ed
at
on
ce
.

•
O
n
ly
on
e
p
ro
d
u
ct
is
in
vo
lv
ed
.

V
ar
ia
bl
es
fo
r
th
e
fu
n
ct
io
n
ar
e:
Q
=
or
d
er
qu
an
ti
ty
,Q
*=
op
ti
m
al

or
d
er
qu
an
ti
ty
,D
=
an
n
u
al
d
em
an
d
qu
an
ti
ty
,S
=
fi
xe
d
co
st
p
er

or
d
er
(n
ot
p
er
u
n
it
,t
yp
ic
al
ly
co
st
of
or
d
er
in
g
an
d
sh
ip
p
in
g
an
d

h
an
d
li
n
g.
T
h
is
is
n
ot
th
e
co
st
of
go
od
s)
,H
=
an
n
u
al
h
ol
d
in
g
co
st
p
er

u
n
it
(a
ls
o
kn
ow
n
as
ca
rr
yi
n
g
co
st
or
st
or
ag
e
co
st
)
(w
ar
eh
ou
se
sp
ac
e,

re
fr
ig
er
at
io
n
,i
n
su
ra
n
ce
,e
tc
.,
u
su
al
ly
n
ot
re
la
te
d
to
th
e
u
n
it
co
st
).

T
h
e
si
n
gl
e-
it
em
E
O
Q
fo
rm
u
la
fi
n
d
s
th
e
m
in
im
u
m
p
oi
n
t
of
th
e

fo
ll
ow
in
g
co
st
fu
n
ct
io
n
(F
ig
u
re
18
.2
0
):

T
ot
al
C
os
t
=
p
u
rc
h
as
e
co
st
+
or
d
er
in
g
co
st
+
h
ol
d
in
g
co
st

•
P
u
rc
h
as
e
co
st
:T
h
is
is
th
e
va
ri
ab
le
co
st
of
go
od
s:
p
u
rc
h
as
e
u
n
it

p
ri
ce
×
an
n
u
al
d
em
an
d
qu
an
ti
ty
.T
h
is
is
P
×
D
.

•
O
rd
er
in
g
co
st
:T
h
is
is
th
e
co
st
of
p
la
ci
n
g
or
d
er
s:
ea
ch
or
d
er

h
as
a
fi
xe
d
co
st
S,
an
d
w
e
n
ee
d
to
or
d
er
D
/Q
ti
m
es
p
er
ye
ar
.

T
h
is
is
S
×
D
/Q
.

•
H
ol
d
in
g
co
st
:t
h
e
av
er
ag
e
qu
an
ti
ty
in
st
oc
k
(b
et
w
ee
n
fu
ll
y

re
p
le
n
is
h
ed
an
d
em
p
ty
)
is
Q
/2
,s
o
th
is
co
st
is
H
×
Q
/2
.

91
9

E
co

no
m
ic

or
d
er

q
ua

nt
ity

fu
nc

tio
n
so

lv
in
g

fo
r
Q
.

Fi
g
ur
e
18

.2
0
E
co
no
m
ic
or
d
er
q
ua
nt
ity

T
o

d
et
er
m
in
e
th
e
m
in
im

u
m
p
oi
n
t
of
th
e
to
ta
lc
os
t
cu
rv
e,
p
ar
ti
al
ly

d
if
fe
re
n
ti
at
e
th
e
to
ta
lc
os
t
w
it
h
re
sp
ec
t
to
Q
(a
ss
u
m
e
al
lo
th
er

va
ri
ab
le
s
ar
e
co
n
st
an
t)
an
d
se
t
to
0
(F
ig
u
re
18
.2
1)
:

So
lv
in
g
fo
r
Q
gi
ve
s
Q
*
(t
h
e
op
ti
m
al
or
d
er
qu
an
ti
ty
)
(F
ig
u
re
18
.2
2)
:

So
u
rc
e:
ht
tp
s:
//
w
w
w
.b
ou
n
d
le
ss
.c
om
/f
in
a
n
ce
/w
or
ki
n
g
-c
a
p
it
a
l-

m
a
n
a
g
em
en
t/
in
ve
n
to
ry
-m
a
n
a
g
em
en
t/
ec
on
om
ic
-o
rd
er
-q
u
a
n
ti
ty
–

te
ch
n
iq
u
e/

C
C
-B
Y
-S
A

B
ou
n
d
le
ss
is
a
n
op
en
ly
li
ce
n
se
d
ed
u
ca
ti
on
a
lr
es
ou
rc
e

Ju
st
-I
n-
Ti
m
e
Te
ch

ni
q
ue

Ju
st

in
tim

e
(J
IT
)i
s
a
p
ro
d
uc

tio
n
st
ra
te
gy

th
at

st
riv

es
to

re
d
uc

e
in
-p
ro
ce

ss
in
ve

nt
or
y
an

d
ca

rr
yi
ng

co
st
s
in

a
m
an

uf
ac

tu
rin

g
sy

st
em

K
E
Y
P
O
IN
TS

•

JI
T
fo
cu
se
s
on
co
n
ti
n
u
ou
s

im
p
ro
ve

m
en
t
an
d
ca
n
im
p
ro
ve
a

m
an
u
fa
ct
u
ri
n
g
or
ga
n
iz
at
io
n
‘s
re
tu
rn
on
in
ve
st
m
en
t,
qu
al
it
y

an
d
ef
fi
ci
en
cy
.

•
JI
T
re
li
es
on
ef
fi
ci
en
t
co
or
d
in
at
io
n
of
el
em
en
ts
in
th
e

in
ve
n
to
ry
ch
ai
n
.

•
T
h
er
e
ar
e
m
an
y
be
n
ef
it
s
of
JI
T
.I
t
im
p
ro
ve
s
th
e
fl
ow
of
go
od
s

fr
om
w
ar
eh
ou
se
to
sh
el
ve
s,
re
d
u
ce
s
se
t
u
p
ti
m
e
an
d

ef
fi
ci
en
tl
y
u
se
s
h
u
m
an
re
so
u
rc
es
.

Ju
st
in
ti
m
e
(J
IT
)
is
a
p
ro
d
u
ct
io
n
st
ra
te
gy
st
ri
vi
n
g
to
im
p
ro
ve
a

bu
si
n
es
s
re
tu
rn
on
in
ve
st
m
en
t
by
re
d
u
ci
n
g
in
-p
ro
ce
ss
in
ve
n
to
ry
an
d

as
so
ci
at
ed
ca
rr
yi
n
g
co
st
s.
T
o
m
ee
t
JI
T
ob
je
ct
iv
es
,t
h
e
p
ro
ce
ss
re
li
es

on
si
gn
al
s
or

K
an

ba
n
be
tw
ee
n
d
if
fe
re
n
t
p
oi
n
ts
in
th
e
p
ro
ce
ss
.

K
an
ba
n
ar
e
u
su
al
ly
“t
ic
ke
ts
”
bu
t
ca
n
be
si
m
p
le
vi
su
al
si
gn
al
s,
li
ke

th
e
p
re
se
n
ce
or
ab
se
n
ce
of
a
p
ar
t
on
a
sh
el
f.
Im
p
le
m
en
te
d
co
rr
ec
tl
y,

JI
T
fo
cu
se
s
on
co
n
ti
n
u
ou
s
im
p
ro
ve
m
en
t
an
d
ca
n
im
p
ro
ve
a

m
an
u
fa
ct
u
ri
n
g
or
ga
n
iz
at
io
n
‘s
re
tu
rn
on
in
ve
st
m
en
t,
qu
al
it
y
an
d

92
0

E
q
ua

tio
n
to

d
et
er
m
in
e
th
e
m
in
im

um
p
oi
nt

of
th
e
to
ta
l

co
st

cu
rv
e.

Fi
g
ur
e
18

.2
1
E
q
ua
tio
n

E
q
ua

tio
n
so

lv
in
g
fo
r
Q
*

Fi
g
ur
e
18

.2
2
E
q
ua
tio
n
3

ef
fi
ci
en
cy
.T
o
ac
h
ie
ve
co
n
ti
n
u
ou
s
im
p
ro
ve
m
en
t,
ke
y
ar
ea
s
of
fo
cu
s

ar
e:

•
fl
ow

•
em
p
lo
ye
e
in
vo
lv
em
en
t

•
qu
al
it
y
(F
ig
u
re
18
.2
3)
.

N
ot
ic
in
g
th
at
st
oc
k
d
ep
le
ti
on
re
qu
ir
es
p
er
so
n
n
el
to
or
d
er
n
ew
st
oc
k

is
cr
it
ic
al
to
th
e
in
ve
n
to
ry
re
d
u
ct
io
n
at
th
e
ce
n
te
r
of
JI
T
.B
u
t
JI
T

re
li
es
on
ot
h
er
el
em
en
ts
in
th
e
in
ve
n
to
ry
ch
ai
n
.T
h
er
ef
or
e,
JI
T
is

be
st
im
p
le
m
en
te
d
as
on
e
p
ar
t
of
an
ov
er
al
ll
ea
n
m
an
u
fa
ct
u
ri
n
g

sy
st
em
.

B
e
n
e
fi
ts
o
f
J
IT
:

•
R
ed
u
ce
d
se
tu
p
ti
m
e.
C
u
tt
in
g
se
tu
p
ti
m
e
al
lo
w
s
th
e
co
m
p
an
y
to

re
d
u
ce
or
el
im
in
at
e
in
ve
n
to
ry
fo
r
“c
h
an
ge
ov
er
”
ti
m
e.

•
T
h
e
fl
ow
of
go
od
s
fr
om
w
ar
eh
ou
se
to
sh
el
ve
s
im
p
ro
ve
s.
Sm
al
l

or
in
d
iv
id
u
al
lo
t
si
ze
s
re
d
u
ce
lo
t
d
el
ay
in
ve
n
to
ri
es
,w
h
ic
h

si
m
p
li
fi
es
in
ve
n
to
ry
fl
ow
an
d
it
s
m
an
ag
em
en
t.

•
E
m
p
lo
ye
es
w
it
h
m
u
lt
ip
le
sk
il
ls
ar
e
u
se
d
m
or
e
ef
fi
ci
en
tl
y.

H
av
in
g
em
p
lo
ye
es
tr
ai
n
ed
to
w
or
k
on
d
if
fe
re
n
t
p
ar
ts
of
th
e

p
ro
ce
ss
al
lo
w
s
co
m
p
an
ie
s
to
m
ov
e
w
or
ke
rs
w
h
er
e
th
ey
ar
e

n
ee
d
ed
.

•
P
ro
d
u
ct
io
n
sc
h
ed
u
li
n
g
an
d
w
or
k
h
ou
r
co
n
si
st
en
cy
ar
e

sy
n
ch
ro
n
iz
ed
w
it
h
d
em
an
d
.I
ft
h
er
e
is
n
o
d
em
an
d
fo
r
a

p
ro
d
u
ct
at
th
e
ti
m
e,
it
is
n
ot
m
ad
e.
T
h
is
sa
ve
s
th
e
co
m
p
an
y

m
on
ey
,e
it
h
er
by
n
ot
h
av
in
g
to
p
ay
w
or
ke
rs
ov
er
ti
m
e
or
by

h
av
in
g
th
em
fo
cu
s
on
ot
h
er
w
or
k.

•
In
cr
ea
se
d
em
p
h
as
is
on
su
p
p
li
er
re
la
ti
on
sh
ip
s.
A
co
m
p
an
y

w
it
h
ou
t
in
ve
n
to
ry
d
oe
s
n
ot
w
an
t
a
su
p
p
ly
sy
st
em
p
ro
bl
em
th
at

cr
ea
te
s
a
p
ar
t
sh
or
ta
ge
.T
h
is
m
ak
es
su
p
p
li
er
re
la
ti
on
sh
ip
s

ex
tr
em
el
y
im
p
or
ta
n
t.

•
Su
p
p
li
es
co
m
e
in
at
re
gu
la
r
in
te
rv
al
s
th
ro
u
gh
ou
t
th
e

p
ro
d
u
ct
io
n
d
ay
.S
u
p
p
ly
is
sy
n
ch
ro
n
iz
ed
w
it
h
p
ro
d
u
ct
io
n

d
em
an
d
an
d
th
e
op
ti
m
al
am
ou
n
t
of
in
ve
n
to
ry
is
on
h
an
d
at

92
1

K
an

b
an

s
m
ai
nt
ai
n
in
ve

nt
or
y
le
ve

ls
;a

si
gn

al
is
se

nt
to

p
ro
d
uc

e
an

d
d
el
iv
er

a
ne

w
sh

ip
m
en

t
as

m
at
er
ia
li
s
co

ns
um

ed
.T

he
se

si
gn

al
s
ar
e
tr
ac

ke
d
th
ro
ug

h
th
e

re
p
le
ni
sh

m
en

t
cy

cl
e
an

d
b
rin

g
vi
si
b
ili
ty

to
su

p
p
lie
rs

an
d
b
uy

er
s

Fi
g
ur
e
18

.2
3
K
an
b
an

an
y
ti
m
e.
W
h
en
p
ar
ts
m
ov
e
d
ir
ec
tl
y
fr
om
th
e
tr
u
ck
to
th
e
p
oi
n
t

of
as
se
m
bl
y,
th
e
n
ee
d
fo
r
st
or
ag
e
fa
ci
li
ti
es
is
re
d
u
ce
d
.

•
M
in
im
iz
es
st
or
ag
e
sp
ac
e
n
ee
d
ed
.

•
Sm
al
le
r
ch
an
ce
of
in
ve
n
to
ry
br
ea
ki
n
g/
ex
p
ir
in
g.

D
ra
w
b
a
ck
s

Ju
st
-i
n
-t
im
e
op
er
at
io
n
ca
n
le
av
e
su
p
p
li
er
s
an
d
d
ow
n
st
re
am

co
n
su
m
er
s
op
en
to
su
p
p
ly
sh
oc
ks
an
d
la
rg
e
su
p
p
ly
or
d
em
an
d

ch
an
ge
s.
In
ad
d
it
io
n
,v
er
y
lo
w
st
oc
k
le
ve
ls
m
ea
n
s
sh
ip
m
en
ts
of
th
e

sa
m
e
p
ar
t
ca
n
co
m
e
in
se
ve
ra
lt
im
es
p
er
d
ay
.T
h
is
m
ea
n
s
fi
rm
s

fa
vo
ri
n
g
JI
T
ar
e
es
p
ec
ia
ll
y
su
sc
ep
ti
bl
e
to
fl
ow
in
te
rr
u
p
ti
on
.

So
u
rc
e:
ht
tp
s:
//
w
w
w
.b
ou
n
d
le
ss
.c
om
/f
in
a
n
ce
/w
or
ki
n
g
-c
a
p
it
a
l-

m
a
n
a
g
em
en
t/
in
ve
n
to
ry
-m
a
n
a
g
em
en
t/
ju
st
-i
n
-t
im
e-
te
ch
n
iq
u
e/

C
C
-B
Y
-S
A

B
ou
n
d
le
ss
is
a
n
op
en
ly
li
ce
n
se
d
ed
u
ca
ti
on
a
lr
es
ou
rc
e

B
en

e
ts

of
In
ve

nt
or
y

M
an

ag
em

en
t

Im
p
ro
ve

d
in
ve

nt
or
y
m
an

ag
em

en
t
ca

n
le
ad

to
in
cr
ea

se
d

re
ve

nu
e,

lo
w
er

ha
nd

lin
g
an

d
ho

ld
in
g
co

st
s,

an
d

im
p
ro
ve

d
ca

sh
o

w
s.

K
E
Y
P
O
IN
TS

•
In
ve
n
to
ry
m
an
ag
em
en
t
is
p
ri
m
ar
il
y
ab
ou
t
sp
ec
if
yi
n
g
th
e

sh
ap
e
an
d
p
er
ce
n
ta
ge
of
st
oc
ke
d
go
od
s.

•
In
ve
n
to
ry
m
an
ag
em
en
t
le
ad
s
to
op
ti
m
al
in
ve
n
to
ry
le
ve
ls
.

•
M
an
ag
em
en
t
of
th
e
in
ve
n
to
ri
es
,w
it
h
th
e
p
ri
m
ar
y
ob
je
ct
iv
e
of

d
et
er
m
in
in
g/
co
n
tr
ol
li
n
g
st
oc
k
le
ve
ls
w
it
h
in
th
e
p
h
ys
ic
al

d
is
tr
ib
u
ti
on
sy
st
em
,f
u
n
ct
io
n
s
to
ba
la
n
ce
th
e
n
ee
d
fo
r
p
ro
d
u
ct

av
ai
la
bi
li
ty
ag
ai
n
st
th
e
n
ee
d
fo
r
m
in
im
iz
in
g
st
oc
k
h
ol
d
in
g
an
d

h
an
d
li
n
g
co
st
s.

•
In
ve
n
to
ry
m
an
ag
em
en
t
ca
n
al
so
h
el
p
co
m
p
an
ie
s
im
p
ro
ve

ca
sh
fl
ow
s.

In
ve
n
to
ry
m
an
ag
em
en
t
is
p
ri
m
ar
il
y
ab
ou
t
sp
ec
if
yi
n
g
th
e
sh
ap
e
an
d

p
er
ce
n
ta
ge
of
st
oc
ke
d
go
od
s.
It
is
re
qu
ir
ed
at
d
if
fe
re
n
t
lo
ca
ti
on
s

w
it
h
in
a
fa
ci
li
ty
or
w
it
h
in
m
an
y
lo
ca
ti
on
s
of
a
su
p
p
ly
n
et
w
or
k
to

p
re
ce
d
e
th
e
re
gu
la
r
an
d
p
la
n
n
ed
co
u
rs
e
of
p
ro
d
u
ct
io
n
an
d
st
oc
k
of

m
at
er
ia
ls
(F
ig
u
re
18
.2
4)
.

92
2

T
h
e
in
te
n
t
of
in
ve
n
to
ry
m
an
ag
em
en
t
is
to
co
n
ti
n
u
ou
sl
y
h
ol
d

op
ti
m
al
in
ve
n
to
ry
le
ve
ls
.T
h
e
sc
op
e
of
in
ve
n
to
ry
m
an
ag
em
en
t

co
n
ce
rn
s
th
e
fi
n
e
li
n
es
be
tw
ee
n
re
p
le
n
is
h
m
en
t
le
ad
ti
m
e,
ca
rr
yi
n
g

co
st
s
of

in
ve
n
to
ry
,a
ss
et
m
an
ag
em
en
t,
in
ve
n
to
ry
fo
re
ca
st
in
g,

in
ve
n
to
ry
va
lu
at
io
n
,i
n
ve
n
to
ry
vi
si
bi
li
ty
,f
u
tu
re
in
ve
n
to
ry

p
ri
ce

fo
re
ca
st
in
g,
p
h
ys
ic
al
in
ve
n
to
ry
,a
va
il
ab
le
p
h
ys
ic
al
sp
ac
e
fo
r

in
ve
n
to
ry
,q
u
al
it
y
m
an
ag
em
en
t,
re
p
le
n
is
h
m
en
t,
re
tu
rn
s
an
d

d
ef
ec
ti
ve
go
od
s,
an
d
d
em
an
d
fo
re
ca
st
in
g.
B
al
an
ci
n
g
th
es
e

co
m
p
et
in
g
re
qu
ir
em
en
ts
le
ad
s
to
op
ti
m
al
in
ve
n
to
ry
le
ve
ls
,w
h
ic
h
is

an
on
-g
oi
n
g
p
ro
ce
ss
as
th
e
bu
si
n
es
s
n
ee
d
s
sh
if
t
an
d
re
ac
t
to
th
e

w
id
er
en
vi
ro
n
m
en
t.

M
an
ag
em
en
t
of
th
e
in
ve
n
to
ri
es
,w
it
h
th
e
p
ri
m
ar
y
ob
je
ct
iv
e
of

d
et
er
m
in
in
g/
co
n
tr
ol
li
n
g
st
oc
k
le
ve
ls
w
it
h
in
th
e
p
h
ys
ic
al

d
is
tr
ib
u
ti
on
sy
st
em
,f
u
n
ct
io
n
s
to
ba
la
n
ce
th
e
n
ee
d
fo
r
p
ro
d
u
ct

av
ai
la
bi
li
ty
ag
ai
n
st
th
e
n
ee
d
fo
r
m
in
im
iz
in
g
st
oc
k
h
ol
d
in
g
an
d

h
an
d
li
n
g
co
st
s.
In
ve
n
to
ry
m
an
ag
em
en
t
in
vo
lv
es
sy
st
em
s
an
d

p
ro
ce
ss
es
th
at
id
en
ti
fy
in
ve
n
to
ry
re
qu
ir
em
en
ts
,s
et
ta
rg
et
s,
p
ro
vi
d
e

re
p
le
n
is
h
m
en
t
te
ch
n
iq
u
es
,r
ep
or
t
ac
tu
al
an
d
p
ro
je
ct
ed
in
ve
n
to
ry

st
at
u
s,
an
d
h
an
d
le
al
lf
u
n
ct
io
n
s
re
la
te
d
to
th
e
tr
ac
ki
n
g
an
d

m
an
ag
em
en
t
of
m
at
er
ia
l.
T
h
is
w
ou
ld
in
cl
u
d
e
th
e
m
on
it
or
in
g
of

m
at
er
ia
lm
ov
ed
in
to
an
d
ou
t
of
st
oc
kr
oo
m
lo
ca
ti
on
s
an
d
th
e

re
co
n
ci
li
n
g
of
th
e
in
ve
n
to
ry
ba
la
n
ce
s.
It
al
so
m
ay
in
cl
u
d
e
A
B
C

an
al
ys
is
,l
ot
tr
ac
ki
n
g,
cy
cl
e
co
u
n
ti
n
g
su
p
p
or
t,
et
c.
A
ll
of
th
es
e

p
ra
ct
ic
es
le
ad
s
to
op
ti
m
al
p
ro
d
u
ct
st
or
ag
e,
h
el
p
in
g
m
in
im
iz
e

h
ol
d
in
g
an
d
h
an
d
li
n
g
co
st
s.

In
ve
n
to
ry
m
an
ag
em
en
t
al
so
ca
n
h
el
p
co
m
p
an
ie
s
im
p
ro
ve
ca
sh

fl
ow
s.
C
om
p
an
ie
s
w
it
h
ef
fe
ct
iv
e
in
ve
n
to
ry
m
an
ag
em
en
t
d
o
n
ot
h
av
e

to
sp
en
d
la
rg
e
ca
p
it
al
ba
la
n
ce
s
fo
r
p
u
rc
h
as
in
g
en
or
m
ou
s
am
ou
n
ts
of

in
ve
n
to
ry
at
on
ce
.T
h
is
al
so
sa
ve
s
h
an
d
li
n
g
an
d
h
ol
d
in
g
co
st
s.

92
3

Fe
m
al
e
cl
er
k
d
oi
ng

in
ve

nt
or
y
w
or
k

us
in
g
a
ha

nd
he

ld
co

m
p
ut
er

in
a

Te
sc

o
Lo

tu
s
su

p
er
m
ar
ke

t
in

S
ak

on
N
ak

ho
n,

Th
ai
la
nd

Fi
g
ur
e
18

.2
4
In
ve
nt
or
y

m
an
ag
em

en
t

So
u
rc
e:
ht
tp
s:
//
w
w
w
.b
ou
n
d
le
ss
.c
om
/f
in
a
n
ce
/w
or
ki
n
g
-c
a
p
it
a
l-

m
a
n
a
g
em
en
t/
in
ve
n
to
ry
-m
a
n
a
g
em
en
t/
be
n
ef
it
s-
of
-i
n
ve
n
to
ry
–

m
a
n
a
g
em
en
t/

C
C
-B
Y
-S
A

B
ou
n
d
le
ss
is
a
n
op
en
ly
li
ce
n
se
d
ed
u
ca
ti
on
a
lr
es
ou
rc
e

D
an

ge
rs

of
In
ve

nt
or
y

M
an

ag
em

en
t

E
xc

es
si
ve

in
ve

nt
or
y
m
ea

ns
id
le

fu
nd

s
w
hi
ch

ea
rn

no
p
ro
t
s;

in
ad

eq
ua

te
in
ve

nt
or
y
m
ea

ns
lo
st

sa
le
s.

K
E
Y
P
O
IN
TS

•
In
ve
n
to
ry
m
an
ag
em
en
t
is
p
ri
m
ar
il
y
ab
ou
t
sp
ec
if
yi
n
g
th
e
si
ze

an
d
p
la
ce
m
en
t
of
st
oc
ke
d
go
od
s.
In
ve
n
to
ry
m
an
ag
em
en
t
is

re
qu
ir
ed
at
d
if
fe
re
n
t
lo
ca
ti
on
s
w
it
h
in
a
fa
ci
li
ty
or
w
it
h
in

m
u
lt
ip
le
lo
ca
ti
on
s
of
a
su
p
p
ly
n
et
w
or
k
to
p
ro
te
ct
th
e
re
gu
la
r

an
d
p
la
n
n
ed
co
u
rs
e
of
p
ro
d
u
ct
io
n
ag
ai
n
st
th
e
ra
n
d
om

d
is
tu
rb
an
ce
of
ru
n
n
in
g
ou
t
of
m
at
er
ia
ls
or
go
od
s.

•
T
h
e
sc
op
e
of
in
ve
n
to
ry
m
an
ag
em
en
t
al
so
co
n
ce
rn
s
th
e
fi
n
e

li
n
es
be
tw
ee
n
re
p
le
n
is
h
m
en
t
le
ad
ti
m
e,
ca
rr
yi
n
g
co
st
s
of

in
ve
n
to
ry
,a
ss
et
m
an
ag
em
en
t,
in
ve
n
to
ry
fo
re
ca
st
in
g,

in
ve
n
to
ry
va
lu
at
io
n
,i
n
ve
n
to
ry
vi
si
bi
li
ty
,f
u
tu
re
in
ve
n
to
ry

p
ri
ce
fo
re
ca
st
in
g,
p
h
ys
ic
al
in
ve
n
to
ry
,a
va
il
ab
le
p
h
ys
ic
al
sp
ac
e

fo
r
in
ve
n
to
ry
,q
u
al
it
y
m
an
ag
em
en
t,
re
p
le
n
is
h
m
en
t,
re
tu
rn
s,

an
d
d
ef
ec
ti
ve
go
od
s
an
d
d
em
an
d
fo
re
ca
st
in
g.
B
al
an
ci
n
g
th
es
e

co
m
p
et
in
g
re
qu
ir
em
en
ts
le
ad
s
to
op
ti
m
al
in
ve
n
to
ry
le
ve
ls
,

w
h
ic
h
is
an
on
-g
oi
n
g
p
ro
ce
ss
as
th
e
bu
si
n
es
s
n
ee
d
s
sh
if
t
an
d

re
ac
t
to
th
e
w
id
er
en
vi
ro
n
m
en
t
(F
ig
u
re
18
.2
5)
.

•
E
xc
es
si
ve
in
ve
n
to
ry
m
ea
n
s
th
e
fi
rm
h
as
id
le
fu
n
d
s
w
h
ic
h
ea
rn

n
o
p
ro
fi
ts
fo
r
th
e
fi
rm
.I
n
ad
d
it
io
n
,e
xc
es
si
ve
in
ve
n
to
ry
in
cu
rs

ex
tr
a
h
an
d
li
n
g
co
st
s
an
d
h
ol
d
in
g
co
st
s.
H
ow
ev
er
,i
t
is
n
ot
w
el
l

92
4

K
E
Y
P
O
IN
TS

(c
on
t.
)

ad
vi
se
d
fo
r
th
e
fi
rm
to
ke
ep
lo
w
in
ve
n
to
ry
le
ve
ls
,s
in
ce

in
ad
eq
u
at
e
in
ve
n
to
ry
m
ea
n
s
th
e
fi
rm
d
oe
s
n
ot
h
av
e
su
ff
ic
ie
n
t

ra
w
m
at
er
ia
ls
fo
r
p
ro
d
u
ct
io
n
.W
h
en
it
em
s
ar
e
re
qu
ir
ed
on
a

br
ea
kd
ow
n
ba
si
s
an
d
fi
n
d
ou
t
th
at
th
er
e
is
n
ot
en
ou
gh
st
oc
k

as
a
re
su
lt
of
re
d
u
ci
n
g
it
,t
h
is
co
u
ld
le
ad
to
lo
ss
of
p
ro
d
u
ct
io
n
.

In
ad
eq
u
at
e
in
ve
n
to
ry
al
so
m
ea
n
s
n
ot
am
p
le
go
od
s
to
se
ll
.T
h
e

co
m
p
an
y,
as
a
re
su
lt
,f
ac
es
th
e
ri
sk
of
lo
si
n
g
cu
st
om
er
s
to

co
m
p
et
it
or
s.

•
In
ve
n
to
ry
m
an
ag
em
en
t
w
il
lb
e
m
or
e
co
m
p
li
ca
te
d
as

m
od
er
at
e
in
fl
at
io
n
an
d
se
as
on
al
it
y
ge
ts
in
vo
lv
ed
.I
n
fl
at
io
n

en
co
u
ra
ge
s
th
e
fi
rm
to
p
u
rc
h
as
e
m
or
e
in
ve
n
to
ry
,e
xp
os
in
g

th
em
to
ex
ce
ss
iv
e
in
ve
n
to
ry
.W
it
h
ou
t
an
ac
cu
ra
te
sa
le
s

fo
re
ca
st
,c
om
p
an
ie
s
op
er
at
in
g
in
se
ct
or
s
af
fe
ct
ed
by

se
as
on
al
it
y
fa
ce
sh
or
ta
ge
d
u
ri
n
g
h
ig
h
ti
m
e
an
d
ex
ce
ss
of

in
ve
n
to
ry
d
u
ri
n
g
lo
w
ti
m
e
of
th
e
ye
ar
.

In
ve
n
to
ry
m
an
ag
em
en
t
is
p
ri
m
ar
il
y
ab
ou
t
sp
ec
if
yi
n
g
th
e
si
ze
an
d

p
la
ce
m
en
t
of
st
oc
ke
d
go
od
s.
In
ve
n
to
ry
m
an
ag
em
en
t
is
re
qu
ir
ed
at

d
if
fe
re
n
t
lo
ca
ti
on
s
w
it
h
in
a
fa
ci
li
ty
or
w
it
h
in
m
u
lt
ip
le
lo
ca
ti
on
s
of
a

su
p
p
ly
n
et
w
or
k
to
p
ro
te
ct
th
e
re
gu
la
r
an
d
p
la
n
n
ed
co
u
rs
e
of

p
ro
d
u
ct
io
n
ag
ai
n
st
th
e
ra
n
d
om
d
is
tu
rb
an
ce
of
ru
n
n
in
g
ou
t
of

m
at
er
ia
ls
or
go
od
s.

T
h
e
sc
op
e
of
in
ve
n
to
ry
m
an
ag
em
en
t
al
so
co
n
ce
rn
s
th
e
fi
n
e
li
n
es

be
tw
ee
n
re
p
le
n
is
h
m
en
t
le
ad
ti
m
e,
ca
rr
yi
n
g
co
st
s
of
in
ve
n
to
ry
,a
ss
et

m
an
ag
em
en
t,
in
ve
n
to
ry
fo
re
ca
st
in
g,
in
ve
n
to
ry
va
lu
at
io
n
,i
n
ve
n
to
ry

vi
si
bi
li
ty
,f
u
tu
re
in
ve
n
to
ry
p
ri
ce
fo
re
ca
st
in
g,
p
h
ys
ic
al
in
ve
n
to
ry
,

av
ai
la
bl
e
p
h
ys
ic
al
sp
ac
e
fo
r
in
ve
n
to
ry
,q
u
al
it
y
m
an
ag
em
en
t,

re
p
le
n
is
h
m
en
t,
re
tu
rn
s,
an
d
d
ef
ec
ti
ve
go
od
s
an
d
d
em
an
d

fo
re
ca
st
in
g.
B
al
an
ci
n
g
th
es
e
co
m
p
et
in
g
re
qu
ir
em
en
ts
le
ad
s
to

op
ti
m
al
in
ve
n
to
ry
le
ve
ls
,w
h
ic
h
is
an
on
-g
oi
n
g
p
ro
ce
ss
as
th
e

bu
si
n
es
s
n
ee
d
s
sh
if
t
an
d
re
ac
t
to
th
e
w
id
er
en
vi
ro
n
m
en
t
(F
ig
u
re
18
.

25
).

E
xc
es
si
ve
in
ve
n
to
ry
m
ea
n
s
th
e
fi
rm
h
as
id
le
fu
n
d
s
w
h
ic
h
ea
rn
n
o

p
ro
fi
ts
fo
r
th
e
fi
rm
.I
n
ad
d
it
io
n
,e
xc
es
si
ve
in
ve
n
to
ry
in
cu
rs
ex
tr
a

h
an
d
li
n
g
co
st
s
an
d
h
ol
d
in
g
co
st
s.
H
ow
ev
er
,i
t
is
n
ot
w
el
la
d
vi
se
d
fo
r

th
e
fi
rm
to
ke
ep
lo
w
in
ve
n
to
ry
le
ve
ls
,s
in
ce
in
ad
eq
u
at
e
in
ve
n
to
ry

m
ea
n
s
th
e
fi
rm
d
oe
s
n
ot
h
av
e
su
ff
ic
ie
n
t
ra
w
m
at
er
ia
ls
fo
r

p
ro
d
u
ct
io
n
.W
h
en
it
em
s
ar
e
re
qu
ir
ed
on
a
br
ea
kd
ow
n
ba
si
s
an
d
fi
n
d

ou
t
th
at
th
er
e
is
n
ot
en
ou
gh
st
oc
k
as
a
re
su
lt
of
re
d
u
ci
n
g
it
,t
h
is

92
5

In
ve

nt
or
y
co

nt
ro
l-

in
ve

nt
or
y
co

st
el
em

en
ts

(h
ol
d
in
g
co

st
,o

rd
er

co
st
,t
ot
al
)P
ar
am

et
er
s:

O
rd
er
-c
os

t
(C
)1

0,
d
em

an
d
(D
)1

00
0,

ho
ld
in
g
co

st
(i)

20
%

(o
f

p
ric

e)
,p

ric
e
(p
)1

0
=
>

E
O
Q

=
10

Fi
g
ur
e
18

.2
5
In
ve
nt
or
y

co
nt
ro
l

co
u
ld
le
ad
to
lo
ss
of
p
ro
d
u
ct
io
n
.I
n
ad
eq
u
at
e
in
ve
n
to
ry
al
so
m
ea
n
s

n
ot
am
p
le
go
od
s
to
se
ll
.T
h
e
co
m
p
an
y,
as
a
re
su
lt
,f
ac
es
th
e
ri
sk
of

lo
si
n
g
cu
st
om
er
s
to
co
m
p
et
it
or
s.

In
ve
n
to
ry
m
an
ag
em
en
t
w
il
lb
e
m
or
e
co
m
p
li
ca
te
d
as
m
od
er
at
e

in
fl
at
io
n
an
d
se
as
on
al
it
y
ge
ts
in
vo
lv
ed
.I
n
fl
at
io
n
en
co
u
ra
ge
s
th
e

fi
rm
to
p
u
rc
h
as
e
m
or
e
in
ve
n
to
ry
,e
xp
os
in
g
th
em
to
ex
ce
ss
iv
e

in
ve
n
to
ry
.W
it
h
ou
t
an
ac
cu
ra
te
sa
le
s
fo
re
ca
st
,c
om
p
an
ie
s
op
er
at
in
g

in
se
ct
or
s
af
fe
ct
ed
by
se
as
on
al
it
y
fa
ce
sh
or
ta
ge
d
u
ri
n
g
h
ig
h
ti
m
e
an
d

ex
ce
ss
of
in
ve
n
to
ry
d
u
ri
n
g
lo
w
ti
m
e
of
th
e
ye
ar
.

So
u
rc
e:
ht
tp
s:
//
w
w
w
.b
ou
n
d
le
ss
.c
om
/f
in
a
n
ce
/w
or
ki
n
g
-c
a
p
it
a
l-

m
a
n
a
g
em
en
t/
in
ve
n
to
ry
-m
a
n
a
g
em
en
t/
d
a
n
g
er
s-
of
-i
n
ve
n
to
ry
–

m
a
n
a
g
em
en
t/

C
C
-B
Y
-S
A

B
ou
n
d
le
ss
is
a
n
op
en
ly
li
ce
n
se
d
ed
u
ca
ti
on
a
lr
es
ou
rc
e

92
6

Chapter 15 “Dividends” from Finance by Boundless is used under the terms of the Creative
Commons Attribution-ShareAlike 3.0 Unported license. © 2014, boundless.com. UMGC has modifie

this work and it is available under the original licens

(UMGC, 2014)-Retrieved from https://leocontent.umgc.edu/content/dam/equella-content/finc331/Chapter15Dividends

C
h
a
p
te
r
15

D
iv
id
en

d
s

tp
s:
//
w
w
w
.b
ou

nd
le
ss
.c
om

/
na

nc
e/

d
iv
id
en

d
s/

D
e

ni
ng

D
iv
id
en

d
s

Th
e
N
at
ur

e
of

D
iv
id
en

d
s

D
iv
id
en

d
Ir
re
le
va

nc
e
Th

eo
ry

lu
e
of

a
Lo

w
D
iv
id
en

Se
ct
io
n
1

W
ha

ar
e

D
iv
id
en

d
s

79
2

ht
tp
s:
//
w
w
w
.b
ou

nd
le
ss
.c
om

/
na

nc
e/
d
iv
id
en

d
s/
w
ha

t-
ar
e-
d
iv
id
en

d
s/

D
e

ni
ng

D
iv
id
en

d
s

D
iv
id
en

d
s
ar
e
a
p
or
tio

n
of

co
m

p
an

y
ea

rn
in
gs

re
gu

la
rly

p
ai
d
to

ar
eh

ol
d
er

p
ai
d
as

m
e

x

d
am

ou
nt

p
er

sh
ar
e

p
ric

K
E
Y
P
O
IN
TS

•

D
iv
id
en
d
s

ar
e
p
er
io
d
ic
al

p
ay

m
en

a
co

rp
or
at
io

n
ca

n
ch

oo
se

is
su

e
to

it
s
sh
ar
eh

ol
d
er
s,

w
it
h

th
e

am
ou
n

t
of

p
ay
m

en
t

ea
ch

sh
ar
eh
ol
d
e

r
co

m
m
en
su
ra
te
w
it
h

th
ei
r

n
u
m
be

r
of

sh
ar

T
h
e

y
m
ay

be
p
ai
d
as

ca
sh

,a
d
d
it
io
n
al

st
oc

k,
or

p
ro
p
er
ty
.

•
D
iv
id
en
d
s
m
ay
al
so
be
ca
te
go
ri
ze
d
as
co
m

m
on

st
oc

k
or

p
re
fe
rr
ed

d
iv
id
en
d
s;
p
re
fe
rr
ed
st
oc
k

ow
n

er
s
ge
t
th
ei
r

d
iv
id
en
d
s
p
ai
d
in
fu
ll
fi
rs
t,
be
fo
re
an
y
co
m
m
on
st
oc
k

d
iv
id
en
d
s
ar
e
d
is
tr
ib
u
te

d
.

•

R
at
io

s
u
si
n
g
d
iv
id
en
d
va
lu
e,
su

ch
as

d
iv
id
en
d
s
p
er
sh
ar
e

(D
P
S)
,d
iv
id
en
d
yi

d
,a
n

d
p
ay

ou
t

ra
ti
o
h
av
e
h
is
to
ri
ca
ll
y
be
en

se
d

as
in
d
ic
at
or

s
of

a
st
oc
k’
s

in
ve

st
m
en

t
st
re
n
gt
h
an
d
th
e

co
m

p
an
y

‘
s

ov
er

al
lp
er
fo
r

m
an

ce
,t
h
ou
gh
th
ei
r
u
se
fu
ln
es
s
h
as

be
en
co
n
te

st
ed

D
iv
id
en
d
s
ar
e
p
ay
m

en
ts

m
ad
e
by
a
co
rp
or

at
io
n
to

it
s
sh
ar
eh
ol
d
er

m
em
be
rs
o

n
a

re
gu
la
r
(u
su
al
ly
qu
ar
te
rl
y)
ba
si
s–

th
es

e
ar
e
es
se
n
ti
al
ly

th
e
sh
ar
eh
ol
d
er
‘s
p
or
ti
on
of
a
co

m
p
an

y’
s
p
ro
fi
ts
.A
d
iv
id
en
d
is

al
lo
ca
te
d
as
a
fi
xe
d
am
ou
n
t
p
er
sh
ar
e.
T
h
er
ef
or
e,
a
sh
ar
eh
ol
d
er

re
ce
iv
es
a
d
iv
id
en
d
in
p
ro
p
or
ti
on
to
th
ei
r
sh
ar
eh
ol
d
in
g;
ow
n
in
g

m
or
e
sh

ar
es

re
su
lt
s
in
gr
ea
te
r
d
iv
id
en
d
s
fo
r
th
e
sh
ar
eh
ol
d
er
.W
h
en

it
is
ti
m
e
to

m
ak

e
d
iv
id
en
d
p
ay
m
en
ts
,c
or
p
or
at
io
n
s
al

w
ay

s
p
ay

p
re
fe
rr
ed
st
oc
k
ow
n
er
s
fi
rs
t,
an
d

th
en

co
m
m
on
st
oc

k
d
iv
id
en

d
s
ar
e

al
lo
ca
te
d
af
te
r
al
lp
re
fe
rr
ed
d
iv
id
en
d
s
ar
e
p
ai
d
in
fu
ll
.I
n
th
e
U
n
it
ed

St
at
es
,d
iv
id
en
d
s
ar
e
u
su
al
ly

d
ec

la
re
d
qu
ar
te
rl
y
by

th
e
co

rp
or
at
io
n
‘s

bo
ar

d
of

d
ir
ec
to
rs
( F
ig
u
re
15
.1
).

D
iv
id
e
n
d
s
p
e
r
sh
a
re
(D
P
S)
re
fe
rs
to
th
e
d
ol
la
r
am
ou
n
t

sh
ar
eh
ol
d
er

s
ea

fo
r
ea

ch
sh

ar
e,
ca
lc
u
la
te
d
by
d
iv
id
in
g
to
ta
l

d
iv
id
en
d
am
ou
n
t
b

y
to

ta
ln
u
m
be
r

of
sh

ar
es

ou
ts

ta
n
d

D
iv
id
en
d

yi
el
d
re
fe
rs
th
e
ra
ti
o
be
tw
ee
n
d
iv
id
en
d
s
p
er
sh
ar
e
an
d
th
e

m
ar
ke

p
ri
ce
of
ea
ch
sh
ar
e,
an
d
it
is
ex
p
re
ss
ed
in

te
rm

s
of
p
er
ce
n
ta
ge
.

79
3

Th
is

is
an

ad
fo
r
Fr
an

kl
in

A
ut
om

ob
ile

C
om

p
an

fr
om

a
19

22
is
su

e
of

th
e

B
os

to
n
G
lo
b
e,

p
ro
m
ot

in
g
th
e

r
m
‘s

p
re
fe
rr
ed

st
oc

k
as

a
“s
ou

rc
e
of

re
lia
b
le

in
co

m
e”

b
ec

au
se

of
its

7%
d
iv
id
en

d
p
ai
d
in

q
ua

rt
er
ly
in
te
rv
al

Fi
g
ur
e
15

.1
Fi
g
1.
H
is
to
ric
al
d
iv
id
en
d

in
fo
rm

at
io
n
fo
r
Fr
an
kl
in
A
ut
om

ob
ile

C
om

p
an
y

P
ay

ou
t
ra
ti
o
is
ca
lc
u
la
te
d
by
d
iv
id
in
g
th
e

co
m
p
an

y’
s
d
iv
id
en
d
by
th
e

ea
rn

in
gs

p
er
sh
ar
e.
A
p
ay
ou
t
ra
ti
o
gr
ea
te
r

th
an

1
m
ea
n
s
th
e

co
m
p
an
y
is
p
ay
in
g
ou
t
m
or
e
in
d
iv
id
en
d
s
fo
r
th
e
ye
ar
th
an
it

ea
rn
ed
,w
h
il
e
a

lo
w

p
ay
ou
t
ra
ti
o
in
d
ic
at
es

th
at

th
e
co
m
p
an
y
is

re
ta
in
in
g
a
gr
ea
te
r
p
ro
p
or
ti
on
of
th
ei
r
ea
rn
in
gs
in

st
ea

d
of
p
ay
in
g

ou
t

d
iv
id
en

d
s.

T
h
es
e
ra
ti
os
h
av
e
h
is
to
ri
ca
ll
y
be
en
u
se
d
as
in
d
ic
at
or
s

of
a
st
oc
k’
s
in
ve
st
m
en
t
st
re
n
gt
h
an
d
th
e
co
m
p
an
y’
s
ov
er
al
l

p
er
fo
rm

an
ce

D
iv
id
en
d
s
m
ay
be
al
lo
ca
te
d
in
d
if
fe
re
n
t
fo
rm
s
of
p
ay
m
en
t,
ou
tl
in
ed

be
lo
w
:

C
as

h
d
iv
id
en
d
s
ar
e
th
e
m
os

t
co

m
m
on
.A
s
th
e
n
am
e

su
gg

es
ts

th
es
e
ar
e
p
ai
d
ou
t
as
cu
rr
en
cy
vi
a
el
ec
tr
on
ic
fu
n
d
s
tr
an
sf
er
or
a

p
ri
n
te
d
p
ap
er
ch
ec

F
or
ea
ch
sh
ar
e
ow
n
ed
,a

d
ec
la
re
d
am
ou
n
t
of

m
on
ey
is
d
is
tr
ib
u
te
d
.T
h
u
s,
if
a

p
er
so

n
ow

n
s
10
0
0
sh
ar
es
an
d
th
e

sh
d
iv
id
en

d
is
U
SD
0
.9
0
p
er
sh
ar
e,
th
e
h
ol
d
er
of

th
e
st
oc

k
w
il
l

b
e

p
ai
d
U
SD
90
0
.

S
to
ck

d
iv
id
en
d
s
(a
ls
o
kn
ow
n
as
sc
ri
p
s)
ar
e
p
ay
m
en
ts

in
th
e
fo
rm
of
ad
d
it
io
n

al
st
oc

k
sh
ar
es
of
th
e
co
m
p
an
y
it
se
lf
or
on
e
of

it
s
su
bs
id
ia
ri
es
,a
s
th
e
n
am
e
su
gg
es
ts
.T
h
is
m
ay
be
a
m
or
e
p
al
at
ab
le

op
ti
on
fo
r
co
m
p
an
ie
s
w
h
o

w
ou

p
re
fe
r

to
u
se
it
s
ea
rn
in
gs
to
w
ar
d
s

gr
ow

th
of
th
e
co
m
p
an
y,
ra

th
er

th
an
d
iv
er
ti
n
g

th
em

in
to
ca
sh

d
iv
id
en
d
s
fo
r

sh
ar
eh
ol
d
er
s.

P
ro
p
er
ty
d
iv
id
en
d
s
or
d
iv
id
en

d
s
in

sp
ec
ie
(L
at
in
fo
r
“i
n
ki
n
d
“)
ar
e
th
os
e
p
ai
d
ou
t
in
th
e
fo
rm
of
as

se
ts

fr
om
th
e
is
su

in
g
co

rp
or
at
io
n
or
an
ot
h
er
co
rp
or
at
io
n
,s
u
ch
as
a

su
bs
id
ia
ry
co
rp
or
at
io
n
.T
h
ey
ar
e
re
la
ti
ve
ly
ra
re

an
d
ca

n
ta
ke
th
e

fo
rm
of
se
cu
ri
ti
es
of
ot
h
er
co
m
p
an
ie
s
ow
n
ed
by
th
e
is
su
er
,o
r

p
ro
d
u
ct
s
an
d
se
rv
ic
es
.C
om
p
an
ie
s
m
ay
al
so
of
fe
r
r

e
in
ve

st
m
en
t

p
la
n
s
w
h
er
e
sh
ar
eh
ol
d
er
s
ca
n

au
to
m
at
ic
al
ly

re
in
ve

t
d
iv
id
en

d
s
in
to

m
or
e

st
oc
k.

F
or
p
u
bl
ic
co
m
p
an
ie
s,
th
er
e
ar
e
si
x
im
p
or
ta
n
t
d
at
es
to
re
m
em
be
r

re
ga
rd

in
g
d
iv
id
en

d
s:

•
D
ec
la
ra
ti
on
d
at
e

is
th
e

d
ay
th
e
bo
ar
d
of
d
ir
ec
to
rs
an
n
ou
n
ce
s

it
s
in
te
n
ti
on

to
p
ay

a
d
iv
id
en
d
.O
n
th
is
d
ay
,a
li
ab
il
it
y
is

cr
ea
te

d
an

d
th
e
co
m
p
an
y
re
co
rd
s
th
at
li
ab
il
it
y
on
it
s
bo
ok
s;
it

n
ow
ow

es
th
e

m
on
ey
to
th
e
st
oc
kh
ol
d
er
s.
T
h
e
bo
ar
d
w
il
la
ls
o

an
n
ou
n
ce
a
d
at
e
of
re
co
rd
an
d
a
p
ay
m
en
t
d
at
e.

•
In
-d
iv
id
en
d
d
at
e
is
th
e
la
st
d
ay
,w
h
ic

h
is
on

tr
ad

in
g
d
ay

be
fo
re
th
e
ex
-d
iv
id
en
d
d
at
e,
w
h
er
e
th
e
st
oc

k
is

sa
id
to
be
cu
m

d
iv
id
en
d
(‘
w
it
h
[i
n
cl
u
d
in
g]
d
iv
id
en
d
‘)
.I
n
ot
h
er
w
or

d
s,

ex
is
ti
n
g

h
ol
d
er
s
of
th
e
st
oc
k
an
d
an
yo
n
e
w
h
o
bu
ys
it
on
th
is
d
ay
w
il
l

re
ce
iv
e

th
e
d
iv
id
en

d
,w
h
er
ea
s
an
y
h
ol
d
er
s
se
ll
in
g
th
e
st
oc
k

lo
se
th
ei
r
ri
gh

t
to

th
e
d
iv
id
en

d
.A

ft
er
th
is
d
at
e
th
e
st
oc
k

be
co
m
es
ex
-d
iv
id
en
d
.

•
E
x-
d
iv
id
en
d
d
at
e
(t
yp
ic
al
ly
tw
o
tr
ad
in
g
d
ay
s
be
fo
re
th
e
re
co
rd

d
at
e
fo
r
U
.S
.s
ec
u
ri
ti
es
)
is
th
e
d
ay
on
w
h
ic
h
al
ls
h
ar
es
bo
u
gh
t

an
d
so
ld
n
o
lo
n
ge
r
co
m
e
at
ta
ch
ed
w
it
h
th
e
ri
gh
t
to
be
p
ai
d
th
e

m
os
t
re
ce
n
tl
y
d
ec
la
re
d
d
iv
id
en
d
.T
h
is
is
an
im
p
or
ta
n
t
d
at
e
fo
r

an
y
co
m
p
an
y
th
at
h
as
m
an
y
st
oc
kh
ol
d
er
s,
in
cl
u
d
in
g
th
os

e
th
at

tr
ad
e
on
ex
ch
an
ge
s,
as
it
m
ak
es
re
co
n
ci
li
at
io
n
of
w
h
o
is
to
be

p
ai
d
th
e
d
iv
id
en
d
ea
si
er
.E
xi
st
in
g
h
ol
d
er
s
of
th
e
st
oc
k
w
il
l

79
4

re
ce
iv
e
th
e
d
iv
id
en
d
ev
en
if

th
ey

n
ow

se
ll
th
e

st
oc
k,
w
h
er
ea
s

an
yo
n
e
w
h
o
n
ow
bu
ys
th
e
st
oc
k
w
il
ln
ot

re
ce
iv
e
th
e
d
iv
id
en
d
.

It
is
re
la
ti
ve
ly
co
m
m
on
fo
r
a
st
oc
k’
s
p
ri
ce

to
d
ec

re
as

e
on
th
e

ex
-d
iv
id
en
d
d
at
e
by
an
am
ou
n
t
ro
u
gh
ly
eq
u
al
to
th
e
d
iv
id
en
d

p
ai
d
.T
h
is
re
fl
ec
ts
th

e
d
ec

re
as
e
in
th
e
co
m
p
an
y’
s
as
se
ts

re
su
lt
in
g
fr
om
th
e
d
ec
la
ra
ti
on
of
th
e
d
iv
id
en
d
.T
h
e
co
m
p
an
y

d
oe
s
n
ot
ta
ke
an
y
ex
p
li
ci
t
ac
ti
on
to
ad
ju
st
it
s
st
oc
k
p
ri
ce
;i

n
an

ef
fi
ci
en
t

m
ar
ke
t

,
bu
ye
rs
an
d
se
ll
er
s
w
il
la
u
to
m
at
ic
al
ly
p
ri
ce

th
is
in
.

•
B
oo
k
cl
os
u
re
d
at
e
is
w
h
en
co
m
p
an
y
w
il
li
d
ea
ll
y
te
m
p
or
ar
il
y

cl
os
e
it
s
bo
ok
s
fo
r
fr
es
h
tr
an
sf
er
s
of
st
oc
k.

•
R
ec
or
d
d
at
e
re
fe
rs
to
th
e
d
at
e
th
at
sh
ar
eh
ol
d
er
s
m
u
st
be

re
gi
st
er
e

d
on

re
co
rd
in

or
d
er

to
re
ce
iv
e
th
e
d
iv
id
en
d
.

Sh
ar
eh
ol
d
er
s
w
h
o
ar
e
n
ot
re
gi
st
er
ed
as
of
th
is
d
at
e
w
il
ln
ot

re
ce
iv
e
th
e
d
iv
id
en
d
.

•
P
ay
m
en
t
d
at
e
is
th
e
d
ay
w
h
en
th
e
d
iv
id
en
d
s
w
il
la
ct
u
al
ly
be

d
is
tr
ib
u
te
d
to
th
e
sh
ar
eh
ol
d
er
s
of
a
co
m
p
an
y
or
cr
ed
it

ed
to

br
ok
er
ag
e
ac
co
u
n

ts
.

So
u
rc
e:
ht
tp
s:
//
w
w
w
.b
ou
n
d
le
ss
.c
om
/f
in
a
n
ce
/d
iv
id
en
d
s/
w
ha
t-
a
re
–

d
iv
id
en
d
s/
d
ef
in
in
g
-d
iv
id
en
d
s/

C
C
-B
Y
-S
A

B
ou
n
d
le
ss
is
a
n

op
en

ly
li
ce
n
se
d
ed
u
ca
ti
on
a
lr
es
ou
rc
e

Th
e
N
at
ur
e
of

D
iv
id
en

d
s

D
iv
id
en

d
s
ar
e

at
tr
ac

tiv
e
to

m
an

y
in
ve

st
or

s
b
ec

au
se

th
ey

ar
e
se

en
as

st
ea

d
y
st
re
am

s
of

in
co

m
e
fr
om

lo
w

ris
k

in
ve

st
m
en

ts
.

K
E
Y
P
O
IN
TS

•
D
iv
id
en
d
s
of
fe
r
co
n
si
st
en
t
re
tu
rn
s
on
re
la
ti
ve
ly
lo
w
ri
sk

in
ve
st
m
en
ts
.W
h
il
e
co
m
p
an
ie
s
ex
p
er
ie
n
ci
n
g
ra
p
id
gr
ow
th
ar
e

u
n
li
ke
ly
to
of
fe
r
d
iv
id
en
d
s,
es
ta
bl
is
h
e

d
co

m
p
an
ie
s
w
it
h

st
ab

bu
si
n
es
s
an
d
le
ss
ro
om
to
gr
ow
d
o
p
ay
d
iv
id
en
d
s
to

sh
ar
eh
ol
d
er
s.

•
A
fi
rm
‘s
d
iv
id
en

d
d
ec

is
io
n
m
ay
al
so
se
rv
e
as

a
si
gn

al
in
g

d
ev
ic
e
ab
ou
t
a
fi
rm
‘s

fu
tu
re

p
ro
sp

ec
ts
.D
u
e
to
in
fo
rm
at
io
n

as
ym
m
et
ry
be
tw
ee
n
in
ve
st
or
s
an
d
th
e
fi
rm
m
an
ag
er
s,

in
ve
st
or
s
w
il
ll
oo
k
to
in
d
ic
at
or
s
li
ke
d
iv
id
en
d
d
ec
is
io
n
s,

w
h
ic
h
m
a

y
gi
ve

cl
u
es
ab
ou
t
w
h
at
th
e
fi
rm
m
an
ag
er
s
fo
re
ca
st

fo
r
th
e
fi
rm
.

•
C
ri
ti
cs
of
d
iv
id
en
d
s
co
n
te
n
d
th
at
co
m
p
an
y
p
ro
fi
ts
ar
e
be
tt
er

u
se

d
re
in
ve

st
ed
ba
c

k
in

to
th
e
co
m
p
an
y
fo
r
re
se
ar
ch
,

d
ev

el
op

m
en
t,
an
d
ca
p
it
al
ex
p
an

si
on

T
h
e
n
at
u
re
of
d
iv
id
en
d
s
m
ay
ap
p
ea
lt
o
in
ve
st
or
s
be
ca
u
se
th
ey
of
fe
r

co
n
si
st
en
t
re
tu
rn
s
on
re
la
ti
ve
ly
lo
w
ri
sk
in
ve
st
m
en
ts
.W
h
il
e

co
m
p
an
ie
s
ex
p
er
ie
n
ci
n
g
ra
p
id
gr
ow
th
ar
e
u
n
li
ke
ly
to
of
fe
r

79
5

d
iv
id
en
d
s,
es
ta
bl
is
h
ed
co
m
p
an
ie
s
w
it
h
st
ab
le
bu
si
n
es
s
an
d
le
ss

ro
om
to
gr
ow
d
o
p
ay
d
iv
id
en
d
s
to
sh
ar
eh
ol
d
er
s.
D
es
p
it
e
th
e
lo
w

ea
rn
in
gs
gr
ow
th
of
th
es
e
st
oc
ks
,s
h
ar
eh
ol
d
er
s
ge
t
th
e
be
n
ef
it
of

kn
ow
in
g
th
at
th
e
va
lu
e
of
th
ei
r
in
it
ia
li
n
ve
st
m
en
t
is
li
ke
ly
to
re
m
ai
n

st
ab
le
.T
h
e

y
ca

n
st
il
lp
ro
fi
t
of
fa
st
ea
d
y
st
re
am
of
d
iv
id
en
d

p
ay
m
en
ts
.

A
fi
rm
‘s
d
iv
id
e
n
d
d
e
ci
si
o
n
m
ay
al
so
se
rv
e
as
a
si
gn
al
in
g
d
ev
ic
e

w
h
ic
h
gi
ve
s
cl
u
es
ab
ou
t
a
fi
rm
‘s
fu
tu
re
p
ro
sp
ec
ts
.D
u
e
to

in
fo
rm
at
io
n
as
ym
m
et
ry
be
tw
ee
n
in
ve
st
or
s
an
d
th
e
fi
rm
m
an
ag
er
s,

in
ve
st
or
s
w
il
ll
oo
k
to
in
d
ic
at
or
s
li
ke
d
iv
id
en
d
d
ec
is
io
n
s.
St
u
d
ie
s

h
av
e

sh
ow

n
th
at
st
oc
k
p
ri
ce
s
te
n
d

in
cr
ea

se
w
h
en
an
in
cr
ea

se
in

d
iv
id
en

d
s
is
an

n
ou
n

ce
d
an

d
te
n
d
to
d
ec
re
as
e
w
h
en
a
d
ec
re
as

e
or

m
is
si
on

is
an
n
ou
n

ce
d
.M

an
ag
er
s
h
av
e
m
or
e
in
fo
rm
at
io
n
th
an

in
ve
st
or
s
ab
ou
t
th
e
fi
rm
,a
n
d
su
ch
in
fo
rm
at
io
n
m
ay
in
fo
rm
th
ei
r

d
iv
id
en
d
d
ec
is
io
n
s.
W
h
en
m
an
ag
er
s
la
ck
co
n
fi
d
en
ce
in
th
e
fi
rm
‘s

ab
il
it
y
to
ge
n
er
at
e
ca
sh
fl
ow
s
in
th
e
fu
tu
re
th
ey
m
ay
ke
ep

d
iv
id
en
d
s

co
n
s

t
an

or
p
os
si
bl
y
ev
en
re
d
u
ce
th
e
am
ou
n
t
of
d
iv
id
en
d
s
p
ai
d
ou
t.

C
on
ve
rs
el
y,
m
an
ag
er
s
th
at
h
av
e
ac
ce
ss
to
in
fo
rm
at
io
n
th
at
in
d
ic
at
es

ve
ry
go
od
fu
tu
re
p
ro
sp
ec
ts
fo
r
th
e
fi
rm
ar
e
m
or
e
li
ke
ly
to
in
cr
ea
se

d
iv
id
en
d
s.

In
ve

st
or
s
ca
n
u
se
th
is
kn
ow
le
d
ge
ab
ou
t
m
an
ag
er
s’
be
h
av
io
r
to

d
et
er
m
in
e
th
ei
r
d
ec
is
io
n
to
bu
y
or
se
ll
th
e
fi
rm
‘s
st
oc
k,
bi
d
d
in
g
th
e

p
ri
ce
u
p
in

th
e
ca

se
of
a
p
os
it
iv
e
d
iv
id
en
d
su
rp
ri
se
or
se
ll
in
g
it
d
ow
n

w
h
en
d
iv
id
en
d
s
d
o
n
ot

m
ee

t
ex
p
ec
ta
ti
on
s.

T
h
is
,i
n
tu
rn
,m
ay

in
fl
u
en
ce
th
e
d
iv
id
en
d
d
ec
is
io
n
as
m
an
ag
er
s
kn
ow
th
at
st
oc
k

h
ol
d
er
s
cl
os
el
y
w
at
ch
d
iv
id
en
d
an
n
ou
n

ce
m
en

lo
ok

in
g
fo
r
go
od
or

ba
d
n
ew
s.
M
an
ag
er
s
te
n
d
to
av
oi
d
se
n
d
in
g
a
n
eg
at
iv

e
si
gn

al
to
th
e

m
ar
ke
t
ab
ou
t
th
e
fu
tu
re
p
ro
sp
ec
ts
of
th
ei
r
fi
rm
.T
h
is
al
so
te
n
d
s
to

le
ad
to
a
d
iv
id
en
d
p
ol
ic
y
of
a
st
ea
d
y,
gr
ad
u
al
ly
in
cr
ea
si
n
g
p
ay
m
en
t

(F
ig
u
re
15
.2
).

O
n
th
e
ot
h
er
h
an
d
,c
ri
ti
cs
of
d
iv
id
en
d
s
co
n
te
n
d
th
at
co
m
p
an
y

p
ro
fi
ts
ar
e
be
st
re
-i
n
ve
st
ed
ba
ck
in
to
th
e
co
m
p
an
y
fo
r
re
se
ar
ch
an
d

d
ev
el
op
m
en
t,
ca
p
it
al
ex
p
an
si
on
,a
n
d
so
fo
rt
h
.T
h
ei
r
vi
ew
is
th
at
an

ea
ge
rn
es
s
to
re
tu
rn
p
ro
fi
ts
to
sh
ar
eh
ol
d
er
s
m
ay
si
gn
al
to
in
ve
st
or
s

th
at
th
e
m
an

ag
em

en
t
d
oe
s
n
ot
h
av
e
id
ea
s
fo
r
th
e
fi
rm
‘s
fu
tu
re

p
ro
sp
ec
ts
.

79
6

S
to
ck

p
ric

es
m
ay

b
e

in
fo
rm

ed
b
y

a
r
m
‘s

d
iv
id
en

d
d
ec

is
io
ns

Fi
g
ur
e
15

.2
S
to
ck

p
ric
es

sh
ow

n
in
a
tic
ke
r
in

To
ky
o,
Ja
p
an

So
u
rc
e:
ht
tp
s:
//
w
w
w
.b
ou
n
d
le
ss
.c
om
/f
in
a
n
ce
/d
iv
id
en
d
s/
w
ha
t-
a
re
–

d
iv
id
en
d
s/
th
e-
n
a
tu
re
-o
f-
d
iv
id
en
d
s/

C
C
-B
Y
-S
A

B
ou
n
d
le
ss
is
a
n
op
en
ly
li
ce
n
se
d
ed
u
ca
ti
on
a
lr
es
ou
rc
e

D
iv
id
en

d
Ir
re
le
va

nc
e
Th

eo
ry

U
nd

er
p
er
fe
ct

m
ar
ke

t
co

nd
iti
on

s,
st
oc

kh
ol
d
er
s
w
ou

ld
ul
tim

at
el
y
b
e
in

d
i
er
en

b
et
w
ee

n
re
tu
rn
s
fr
om

d
iv
id
en

d
s

or
re
tu
rn
s
fr
om

p
ita

lg
ai
ns

K
E
Y
P
O
IN
TS

•
D
iv
id
en
d
ir
re
le
va
n
ce
co
m
es
fr
om
M
od
ig
li
an
i-
M
il
le
r’
s
ca
p
it
al

ir
re
le
va
n
ce
m
od
el
,w
h
ic
h
w
or
ks
u
n
d
er
sp
ec
if
ic
m
ar
ke
t

co
n
d
it
io
n
s–
n
o
ta
xe
s,
n
o
tr
an
sa
ct
io
n
co
st
s,
an
d
n
o
fl
ot
at
io
n

co
st
s.
In
ve
st
or
s
an
d
fi
rm
s
m
u
st
h
av
e
id
en
ti
ca
lb
or
ro
w

in
g
an

le
n
d
in
g
ra
te
s
an
d
th
e
sa
m
e
in
fo
rm
at
io
n
on
th
e
fi
rm
‘s

p
ro
sp
ec
ts
.

•
F
ir
m
s
th
at
p
ay
m
or
e
d
iv
id
en
d
s
of
fe
r
le
ss
st
oc
k
p
ri
ce

ap
p
re
ci
at
io
n
.H
ow
ev
er
,t
h
e
to
ta
lr
et
u
rn
fr
om
bo
th
d
iv
id
en
d
s

an
d
ca
p
it
al
ga
in
s
to
st
oc
kh
ol
d
er
s
sh
ou
ld
be
th
e
sa
m
e,
so

st
oc
kh
ol
d
er
s
w
ou
ld
u
lt
im
at
el
y
be
in
d
if
fe
re
n
t
be
tw
ee
n
th
e
tw
o

ch
oi
ce
s.

•
If
d
iv
id
en
d
s
ar
e
to
o
sm
al
l,
a
st
oc
kh
ol
d
er
ca
n
si
m
p
ly
ch
oo
se
to

se
ll
so
m
e
p
or
ti
on
of
th
ei
r
st
oc
k
fo
r
ca
sh
an
d
vi
ce
ve
rs
a.

E
co
n
om
is
ts
M
od
ig
li
an
ia
n
d
M
il
le
r
p
u
t
fo
rt
h
a

th
eo

ry
th
at
on
ly
th
e

fi
rm
‘s
ab
il
it
y

to
ea

rn
m
on
ey
an
d
ri
sk
in
es
s
of
it
s
ac
ti
vi
ty
ca
n
h
av
e
an

im
p
ac
t
on
th
e
va
lu
e
of
th
e
co
m
p
an
y;
th
e
va
lu
e
of
a
fi
rm
is

u
n
af
fe
ct
ed
by
h
ow
th
at
fi
rm
is
fi
n
an
ce
d
.I
t
d
oe
s
n
ot
m
at
te
r
if
th
e

79
7

fi
rm
‘s
ca
p
it
al
is
ra
is
ed

by
is
su
in
g
st
oc
k
or

se
ll
in
g
d
eb
t,
n
or
d
oe
s

it
m
at
te
r
w
h
at
th
e

fi
rm
‘s
d
iv
id
en
d
p
ol
ic
y

is
.D
iv
id
en
d

ir
re
le
va
n
ce
fo
ll
ow
s

fr
om
th
is
ca
p
it
al

st
ru
ct
u
re
ir
re
le
va
n
ce

(F
ig
u
re
15
.3
).

M
od
ig
li
an
i-
M
il
le
r
gr
ou
n
d
ed
th
ei
r
th
eo
ry
on
a
se
t
of
as
su
m
p
ti
on
s:

•
N
o
ti
m
e
la
g
an
d
tr
an
sa
ct
io
n
co
st
s
ex
is
t.

•
Se
cu
ri
ti
es
ca
n
be
sp
li
t
in
to
an
y
p
ar
ts
(i
.e
.,
th
ey
ar
e
d
iv
is
ib
le
).

•
N
o
ta
xe
s
an
d
fl
ot

at
io
n
co

st
s.

•
F
in

an
ci
al

le
ve

ra
ge

d
oe
s
n
ot
af
fe
ct
th
e
co
st
of
ca
p
it
al
.

•
B
ot
h
m
an
ag
er
s
an
d
in
ve
st
or
s
h
av
e
ac
ce
ss
to
th
e
sa
m
e

in
fo
rm
at
io
n
.

•
F
ir
m
‘s
co
st
of
eq
u
it
y
is
n
ot
af
fe
ct
ed
in
an
y
w
ay
by
d
is
tr
ib
u
ti
on

of
in
co
m
e
be
tw
ee
n
d
iv
id
en
d
an
d
re
ta
in
ed
ea
rn
in
gs
.

•
D
iv
id
en
d
p
ol
ic
y
h
as
n
o
im
p
ac
t
on
fi
rm
‘s
ca
p
it
al
bu
d
ge
t

U
n
d
er
th
es
e
fr
ic
ti
on
le
ss
p
er
fe
ct
ca
p
it
al
m
ar
ke
t
as
su
m
p
ti
on
s,

d
iv
id
en
d
ir
re
le
va
n
ce
fo
ll
ow
s
fr
om
th
e
M
od
ig
li
an
i-
M
il
le
r
th
eo
re
m
.

E
ss
en
ti
al
ly
,f
ir
m
s
th
at
p
ay
m
or
e
d
iv
id
en
d
s
of
fe
r
le
ss
st
oc
k
p
ri
ce

ap
p
re
ci
at
io
n
th
at
w
ou
ld
be
n
ef
it
st
oc
k
ow
n
er
s
w
h
o
co
u
ld
ch
oo
se
to

p
ro
fi
t
fr
om
se
ll
in
g
th
e
st
oc
k.
H
ow
ev
er
,t
h
e
to
ta
lr
et
u
rn
fr
om
bo
th

d
iv
id
en
d
s
an
d
ca
p
it
al
ga
in
s
to
st
oc
kh
ol
d
er
s
sh
ou
ld
be
th
e
sa

m
e.

d
iv
id
en
d
s
ar
e
to
o
sm
al
l,
a
st
oc
kh
ol
d
er
ca
n
si
m
p
ly
ch
oo
se

to
se

so
m
e
p
or
ti
on
of
h
is
st
oc
k.
T
h
er
ef
or
e,
if
th
er
e
ar
e
n
o
ta
x
ad
va
n
ta
ge
s

or
d
is
ad
va
n
ta
ge
s
in
vo
lv
ed
w
it
h
th
es
e
tw
o
op
ti
on
s,
st
oc
kh
ol
d
er
s

w
ou
ld
u
lt
im
at
el
y
be
in
d
if
fe
re
n
t
be
tw
ee
n
re
tu
rn
s
fr
om
d
iv
id
en
d
s
or

re
tu
rn
s
fr
om

ca
p
it
al
ga
in
s.

Si
n
ce
th
e
p
u
bl
ic
at
io
n
of
th
e
p
ap
er
s
by
M
od
ig
li
an
ia
n
d
M
il
le
r,

n
u
m
er
ou
s
st
u
d
ie
s
h
av
e
sh

ow
n
th
at

it
d
oe
s
n
ot
m
ak
e
an
y
d
if
fe
re
n
ce

to
th
e
w
ea
lt
h
of
sh
ar
eh
ol
d
er
s
w
h
et
h
er
a
co
m
p
an
y
h
as
a
h
ig
h

d
iv
id
en
d
yi
el
d
or

if
a
co

m
p
an
y
u
se
s
it
s
ea
rn
in
gs
to
re
in
ve
st
in
th
e

co
m
p
an
y
an
d
ac
h
ie
ve
s
h
ig
h
er
gr
ow
th
.H
ow
ev
er
,t
h
e
im
p
or
ta
n
ce
of
a

fi
rm
‘s
d
iv
id
en
d
d
ec
is
io
n
is
st
il
lc
on
te
st
ed
,w
it
h
a
n
u
m
be
r
of
th
eo
ri
es

ar
gu
in
g

fo
r
d
iv
id
en

d
re
le
va
n
ce
.

So
u
rc
e:
ht
tp
s:
//
w
w
w
.b
ou
n
d
le
ss
.c
om
/f
in
a
n
ce
/d
iv
id
en
d
s/
w
ha
t-
a
re
–

d
iv
id
en

d
s/
d
iv
id
en

d
-i
rr
el
ev
a
n
ce
-t
he
or
y/

C
C
-B
Y
-S
A

B
ou
n
d
le
ss
is
a
n
op
en
ly
li
ce
n
se
d
ed
u
ca
ti
on
a
lr
es
ou
rc
e

79
8

M
er
to
n

M
ill
er

ne
of

th
e
co

-a
ut
ho

rs
of

th
e
ca

p
ita

l
irr
el
ev

an
ce

th
eo

w
hi
ch

im
p
lie
d

d
iv
id
en

d
irr
el
ev

an
ce

Fi
g
ur
e
15

.3
M
er
to
n

ill
er

Va
lu
e
of

a
Lo

w
D
iv
id
en

d
Lo

w
d
iv
id
en

d
p
ay

ou
ts

ca
n
b
e
in
te
rp
re
te
d
in

a
nu

b
er

of
w
ay

s,
in
cl
ud

in
g:

as
a
le
ad

in
g
in
d
ic
at
or

of
fu
tu
re

gr
ow

h
or

a
si
gn

of
in
st
ab

ili
ty
.

K
E
Y
P
O
IN
TS

•
A
re
la
ti
ve
ly
lo
w
p
ay
ou
t
co
u
ld
m
ea
n
th
at
th
e
co
m
p
an
y
is

re
ta
in
in
g
m
or
e
ea
rn
in
gs
to
w
ar
d
d
ev
el
op
in
g
th
e
fi
rm
in
st
ea
d

of
p
ay
in
g
st
oc
kh
ol
d
er
s,
w
h
ic
h
h
in
ts
at
fu
tu
re
gr
ow
th
.F
u
tu
re

ca
p
it
al
ga
in
s
al
so
h
av
e
ta
x
ad
va
n
ta
ge
s.
T
h
es
e
ar
e
al
lf
ac
to
rs
in

fa
vo

of
in
ve

st
in
g
in
st
oc
ks
w
it
h
lo
w
d
iv
id
en
d
s.

•
If
a
st
oc
k
h
as
a
lo
w
d
iv
id
en
d
yi
el
d
,t
h
is
im
p
li
es
th
at
th
e

st
oc
k’
s
m
ar
ke
t
p
ri
ce
is
co
n
si
d
er
ab
ly
h
ig
h
er
th
an
th
e
d
iv
id
en
d

p
ay
m
en
ts
a
sh
ar
eh
ol
d
er
ge
ts
fr
om
ow
n
in
g
th
e
st
oc
k.
T
h
is
m
ay

in
d
ic
at
e
an
ov
er
va

lu
ed

st
oc
k
or
la
rg

er
d
iv
id
en

d
s
in
th
e
fu
tu
re
.

•
A
h
is
to
ry
of
lo
w
or
fa
ll
in
g
yi
el
d
s
m
ay
in
d
ic
at
e
th
at
th
e
fi
rm
‘s

ca
sh
si
tu
at
io
n
is
n
ot
st
ab
le
.T
h
ey
ca
n
n
ot
af
fo
rd
to
gi
ve
h
ig
h
er

d
iv
id
en
d
s
be
ca
u
se
th
ey
d
o
la
ck
ca
sh
on
h
an
d
.A

s
a
re
su

lt
,

th
er
e
is
so
m
e
m
ea
su
re
of
ri
sk
in
vo
lv
ed
w
it
h
th
es
e
lo
w

d
iv
id
en
d
in
ve
st
m
en
ts
.

T
h
e
va
lu
e
of
a
d
iv
id
en
d
is
ex
p
re
ss
ed
as
so
m
e
p
er
ce
n
ta
ge
p
ro
p
or
ti
on

of
th
e
n
u
m
be
r
of
sh
ar
es
h
el
d
.A
re
la
ti
ve
ly
lo
w
p
ay
ou
t
co
u
ld
m
ea
n

th
at
th
e
co
m
p
an
y
is
re
ta
in
in
g
m
or
e
ea
rn
in
gs
to
w
ar
d
d
ev
el
op
in
g
th
e

fi
rm
in
st
ea
d
of
p
ay
in
g
st
oc
kh
ol
d
er
s.
So
m
e
in
ve
st
or
s
w
ou
ld
p
re
fe
r

th
is
lo
w
p
ay
ou
t
be
ca
u
se
it
h
in
ts
at
fu
tu
re
gr
ow
th
.F
u
rt
h
er
m
or
e,

re
ta
in
ed
ea
rn
in
gs
le
ad
to
lo
n
g-
te
rm
ca
p
it
al
ga
in
s,
w
h
ic
h
h
av
e

ta
xa

ti
on
ad
va
n
ta
ge
s
ov
er
h
ig
h
d
iv
id
en
d
p
ay
ou
ts
,a
cc

or
d
in
g
to

th
e

T
ax
at
io
n
P
re
fe
re
n
ce
T
h
eo
ry
.T
ax
es
on
ca
p
it
al
ga
in
s
ar
e
d
ef
er
re
d
in
to

th
e
fu
tu
re
w
h
e

n
th
e
st
oc

k
is
ac
tu
al
ly
so
ld
,a
s
op
p
os
ed
to

im
m
ed
ia
te
ly
li
ke
ca
sh
d
iv
id
en
d
s.
F
u
rt
h
er
m
or
e,
ca
p
it
al
ga
in
s
ar
e

ta
xe
d
at
lo
w
er
ra
te
s
th
an
d
iv
id
en
d
s.
T
h
er
ef
or
e,
ta
xa
ti
on
be
n
ef
it
is

an
ot
h
er
p
oi
n
t
in
fa
vo
r
of
lo
w
d
iv
id
en
d
p
ay
ou
ts
(F
ig
u
re
15
.4
).

H
ow
ev
er
,u
n
d
er
d
iv
id
en
d
ir
re
le
va
n
ce
th
eo
ry
,t
h
e
ac
tu
al
va
lu
e
of
a

d
iv
id
en
d
is
in
co
n
se
qu
en
ti
al
to
in
ve
st
or
s.
If
th
e
d
iv
id
en
d
is
to
o
lo
w
,

th
ey
ca
n
si
m
p
ly
se
ll
of
fp
ar
t
of
th
ei
r
p
or
tf
ol
io
to
ge
n
er
at
e
m
or
e

in
co
m
e
fo
r
th
em

se
lv
es

.T
h
e
co
n
fl
ic
ti
n
g
th
eo
ri
es
on
d
iv
id
en
d
p
ol
ic
y

co
m
p
li
ca
te
in
te
rp
re
ta
ti
on
s
of
lo
w
d
iv
id
en
d
s
in
re
al
li
fe
.

D
iv
id
en
d
va
lu
e
m
u
st
al
so
be
co
n
si
d
er
ed
in
re
la
ti
on
to
ot
h
er

m
ea
su
re
s
of
th
e
fi
rm
,s
u
ch
as
th
ei
r
ea
rn
in
gs

an
d
st
oc

p
ri
ce
.

79
9

A
cc

or
d
in
g
to

th
e
cl
ie
nt
el
e
e

ec
t,

r
m
s
o

er
in
g
lo
w

d
iv
id
en

d
p
ay

ou
t

w
ill
at
tr
ac

t
ce

rt
ai
n
in
ve

st
or
s
w
ho

ar
e

lo
ok

in
g
fo
r
a
lo
ng

te
rm

in
ve

st
m
en

t
an

d
w
ou

ld
lik
e
to

av
oi
d
ta
xe

Fi
g
ur
e
15

.4
In
ve
st
or

p
re
fe
re
nc

fo
r
lo
w
d
iv
id
en
d
p
ay
ou
ts

If
a
st
oc
k
h
as
a
lo
w
d
iv
id
e
n
d
yi
e
ld
,t
h
is
im
p
li
es
th
at
th
e
st
oc
k’
s

m
ar
ke
t
p
ri
ce
is
co
n
si
d
er
ab
ly
h
ig
h
er
th
an
th
e
d
iv
id
en
d
p
ay
m
en
ts
a

sh
ar
eh
ol
d
er
ge
ts
fr
om
ow
n
in
g
th
e
st
oc
k.
T
h
er
e
ar
e
a
n
u
m
be
r
of

w
ay
s
to
in
te
rp
re
t
th
is
ra
ti
o.
A
h
is
to
ry
of
lo
w
or
fa
ll
in
g
yi
el
d
s
m
ay

in
d
ic
at
e
th
at
th
e
fi
rm
‘s
ca
sh
si
tu
at
io
n
is
n
ot
st
ab
le
.T
h
ey
ca
n
n
ot

af
fo
rd
to
gi
ve
h
ig
h
er
d
iv
id
en
d
s
be
ca
u
se
th
ey
d
o
la
ck
ca
sh
on
h
an
d
.

T
h
is
in
st
ab
il
it
y
ca
n
be

se
en

in
ca
lc
u
la
ti
n
g
th
e
d
iv
id
e
n
d
co
ve
r,

w
h
ic
h
is
ca
lc
u
la
te
d
as
D
C
=
E
P
S/
D
P
S.
A
ra
ti
o
of
2
or
h
ig
h
er
is

co
n
si
d
er
ed
sa
fe
—
in
th
e
se
n
se
th
at
th
e
co
m
p
an
y
ca
n
w
el
la
ff
or
d
th
e

d
iv
id
en
d
—
bu
t
an
yt
h
in
g
be
lo
w
1.
5
is
ri
sk
y.
If
th
e
ra
ti
o
is
u
n
d
er
1,
th
e

co
m
p
an
y
is
u
si
n
g
it
s
re
ta
in
ed
ea
rn
in
gs
fr
om
a
p
re
vi
ou
s
ye
ar
to
p
ay

th
is
ye
ar
‘s
d
iv
id
en
d
,w
h
ic
h
si
gn
al
s
th
e
ri
sk
of
in
st
ab
il
it
y
an
d
p
oo
r

p
er
fo
rm
an
ce
of
th
e
fi
rm
.S
ig
n
s
of
ri
sk
w
il
ld
et
er
in
ve
st
or
s,

p
ar
ti
cu
la
rl
y
if
th
ey
ar
e
lo
ok
in
g
fo
r
ca
sh
d
iv
id
en
d
s
as
a
st
ea
d
y
so
u
rc
e

of
in
co
m
e.

C
on
ve
rs
el
y,
a
lo
w
d
iv
id
en
d
yi
el
d
ca
n
be
co
n
si
d
er
ed
ev
id
en
ce
th
at

th
e
fi
rm
is
ex
p
er
ie
n
ci
n
g
ra
p
id
gr
ow
th
or
th
at
fu
tu
re
d
iv
id
en
d
s
m
ig
h
t

be
h
ig
h
er
.I
n
ve
st
or
s
w
h
o
p
re
fe
r
a
“g
ro
w
th
in
ve
st
m
en
t”
st
ra
te
gy
m
ay

p
re
fe
r
a
st
oc
k
w
it
h
lo
w
to
n
o
d
iv
id
en
d
yi
el
d
s,
as
th
at
is
on
e
of

se
ve

ra
li
n
d
ic
at
or
s
fo
r
a
fi
rm
ex
p
er
ie
n
ci
n
g
qu
ic
k
gr
ow
th
.

So
u
rc
e:
ht
tp
s:
//
w
w
w
.b
ou
n
d
le
ss
.c
om
/f
in
a
n
ce
/d
iv
id
en
d
s/
w
ha
t-
a
re
–

d
iv
id
en
d
s/
va
lu
e-
of
-a
-l
ow
-d
iv
id
en

d
/

C
C
-B
Y
-S
A

B
ou
n
d
le
ss
is
a
n
op
en
ly
li
ce
n
se
d
ed
u
ca
ti
on
a
lr
es
ou
rc
e

80
0

A
cc

ou
nt
in
g
C
on

si
d

er
at
io
ns

In
ve

st
or

P
re
fe
re
nc

S
to
ck

D
iv
id
en

d
s
ve

rs
us

C
as

h
D
iv
id
en

d
s

S
ig
na

lin
g

C
lie
nt
el
e

Se
ct
io
n
2

D
iv
id
en

d
P
ol
ic
y

80
1

ht
tp
s:
//
w
w
w
.b
ou

nd
le
ss
.c
om

/
na

nc
e/
d
iv
id
en

d
s/
d
iv
id
en

d
-p
ol
ic
y/

A
cc

ou
nt
in
g
C
on

si
d
er
at
io
ns

A
cc

ou
nt
in
g
fo
r
d
iv
id
en

d
s

d
ep

en
d
s
on

th
ei
r
p
ay

m
en

t
m
et
ho

d
(c
as

h
or

st
oc

k)
.

K
E
Y
P
O
IN
TS

•
C
as
h
d
iv
id
en
d
s
ar
e
p
ay
m
en
ts
ta
ke
n
d
ir
ec
tl
y
fr
om
th
e
fi
rm
‘s

in
co
m
e.
T
h
is
is
fo
rm
al
ly
ac
co
u
n
te
d
fo
r
by
m
ar
ki
n
g
th
e

am
ou
n
t
d
ow
n
as
a
li
ab
il
it
y
fo
r
th
e
fi
rm
.T
h
e
am
ou
n
t
is

tr
an
sf
er
re
d
in
to
a
se
p
ar
at
e
d
iv
id
en
d
s
p
ay
ab
le
ac
co
u
n
t
an
d

th
is
is
d
eb
it

ed
on

p
ay
m
en
t
d
ay
.

•
A
cc
ou
n
ti
n
g
fo
r
st
oc
k
d
iv
id
en
d
s
is
es
se
n
ti
al
ly
a
tr
an
sf
er
fr
om

re
ta
in
ed
ea
rn
in
gs
to
p
ai
d
-i
n
ca
p
it
al
.

•
U
n
li
ke
ca
sh
d
iv
id
en
d
s,
st
oc
k
d
iv
id
en
d
s
d
o
n
ot
co
m
e
ou
t
of
th
e

fi
rm
‘s
in
co
m
e,
so
th
e
fi
rm
is
ab
le
to
bo
th
m
ai
n
ta
in
th
ei
r
ca
sh

an
d
of
fe
r
d
iv
id
en
d
s.
T
h
e
fi
rm
‘s
n
et
as
se
ts
re
m
ai
n
th
e
sa
m
e,
as

d
oe
s
th
e
w
ea
lt
h
of
th
e
in
ve
st
or
.

A
cc
ou
n
ti
n
g
fo
r
d
iv
id
en
d
s
d
ep
en
d
s
on
th
ei
r
p
ay
m
en
t
m
et
h
od
(c
as
h

or
st
oc
k)
.O
n
th
e
d
ec
la
ra
ti
on
d
ay
,t
h
e
fi
rm
‘s
B
oa
rd
of
D
ir
ec
to
rs

an
n
ou
n
ce
s
th
e
is
su
an
ce
of
st
oc
k
d
iv
id
en
d
s
or
p
ay
m
en
t
of
ca
sh

d
iv
id
en
d
s.
C
as
h
d
iv
id
en
d
s
ar
e
p
ay
m
en
ts
ta
ke
n
d
ir
ec
tl
y
fr
om
th
e

fi
rm
‘s
in
co
m
e.
T
h
is
is
fo
rm
al
ly
ac
co
u
n
te
d
fo
r
by
m
ar
ki
n
g
th
e

am
ou
n
t
d
ow
n
as
a
li
ab
il
it
y
fo
r
th
e
fi
rm
.T
h
e
am
ou
n
t
is
p
la
ce
d
in
a

se
p
ar
at
e
d
iv
id
en
d
s
p
ay
ab
le
ac
co
u
n
t.

T
h
e
ac
co
u
n
ti
n
g
eq
u
at
io
n
fo
r
th
is
is
si
m
p
ly
:

R
et
ai
n
ed
E
ar
n
in
gs
=
N
et
In
co
m
e
−
D
iv
id
en
d
s

R
et
ai
n
ed
ea
rn
in
gs
ar
e
p
ar
t
of
th
e
ba
la
n

ce
sh

ee
t
(a
n
ot
h
er
ba
si
c

fi
n
an
ci
al
st
at
em
en
t)
u
n
d
er
“s
to
ck
h
ol
d
er
s
eq
u
it
y
(s
h
ar
eh
ol
d
er
s’

eq
u
it
y)
.”
It
is
m
os
tl
y
af
fe
ct
ed
by
n
et
in
co
m
e
ea
rn
ed
d
u
ri
n
g
a
p
er
io
d

of
ti
m
e
by
th
e
co
m
p
an
y
le
ss
an
y
d
iv
id
en
d
s
p
ai
d
to
th
e
co
m
p
an
y’
s

ow
n
er
s/
st
oc
kh
ol
d
er
s.
T
h
e
re
ta
in
ed
ea
rn
in
gs
ac
co
u
n
t
on
th
e
ba
la
n
ce

sh
ee
t
is
sa
id
to
re
p
re
se
n
t
an
“a
cc
u
m
u
la
ti
on
of
ea
rn
in
gs
”
si
n
ce
n
et

p
ro
fi
ts
an
d
lo
ss

es
ar
e

ad
d
ed
/s
u
bt
ra
ct
ed
fr
om
th
e
ac
co
u
n
t
fr
om

p
er
io
d
to
p
er
io
d
.

O
n
th
e
d
at
e
of
p
ay
m
en
t,
w
h
en
d
iv
id
en
d
ch
ec
ks
ar
e
m
ai
le
d
ou
t
to

st
oc
kh
ol
d
er
s,
th
e
d
iv
id
en
d
s
p
ay
ab
le
ac
co
u
n
t
is
d
eb
it
ed
an
d
th
e

fi
rm
‘s
ca
sh
ac
co
u
n
t
is
cr
ed
it
ed
.

St
oc
k
d
iv
id
en
d
s
ar
e
p
ar
se
d
ou
t
as
ad
d
it
io
n
al
st
oc
ks
to
sh
ar
eh
ol
d
er
s

on
re
co
rd
.U
n
li
ke
ca
sh
d
iv
id
en
d
s,
th
is
d
oe
s
n
ot
co
m
e
ou
t
of
th
e

fi
rm
‘s
in
co
m
e.
T
h
e
fi
rm
is
ab
le
to
bo
th
m
ai
n
ta
in
th
ei
r
ca
sh
an
d
gi
ve

d
iv
id
en
d
s
to
in
ve
st
or
s.
H
er
e,
th
e
fi
rm
‘s
n
et
as
se
ts
re
m
ai
n
th
e
sa
m
e.

If
a
fi
rm
au
th
or
iz
es
a
15
%
st
oc
k
d
iv
id
en
d
on
D
ec
1s
t,
d
is
tr
ib
u
ta
bl
e

on
F
eb
29
,a
n
d
to
st
oc
kh
ol
d
er
s
of
re
co
rd
on
F
eb
1,
th
e
st
oc
k

cu
rr
en
tl
y
h
as
a
m
ar
ke

t
va

lu
e
of
$
15
an
d
a
p
ar
va
lu
e
of
$
4.
T
h
er
e
ar
e

15
0
,0
0
0
sh
ar
es
ou
ts
ta
n
d
in
g
an
d
th
e
fi
rm
w
il
li
ss
u
e
22
,5
0
0

80
2

ad
d
it
io
n
al
sh
ar
es
.T
h
e
va
lu
e
of
th
e
d
iv
id
en
d
is
(1
50
,0
0
0
)(
15
%
)(
15
)
=

$
33
7,
50
0
.

T
h
e
d
ec
la
ra
ti
on
of
th
is
d
iv
id
en
d
d
eb
it
s
re
ta
in
ed
ea
rn
in
gs
fo
r
th
is

va
lu
e
an
d
cr
ed
it
s
th
e
st
oc
k
d
iv
id
en
d
d
is
tr
ib
u
ta
bl
e
ac
co
u
n
t
fo
r
th
e

n
u
m
be
r
of
n
ew
st
oc
k
is
su
ed
(1
50
,0
0
0
*.
15
=
22
,5
0
0
)
at
p
ar
va
lu
e.

W
e
m
u
st
al
so
co
n
si
d
er
th
e
d
if
fe
re
n
ce
be
tw
ee
n
m
ar
ke
t
va
lu
e
an
d
p
ar

(s
ta
te
d
)
va
lu
e
an
d
re
co
rd
th
at
as
cr
ed
it
fo
r
ad
d
it
io
n
al
p
ai
d
-i
n
–

ca
p
it
al
(F
ig
u
re
15
.5
).
O
n
th
e
d
ay
of
is
su
an
ce
,t
h
e
st
oc
k
d
iv
id
en
d
s

d
is
tr
ib
u
ta
bl
e
ac
co
u
n
t
is
d
eb
it
ed
an
d
st
oc
k
is
cr
ed
it
ed
$
90
,0
0
0
.

E
X
A
M
P
LE

C
as
h
d
iv
id
en
d
ex
am
p
le
:F
ir
m
A
‘s
B
oa
rd
of
D
ir
ec
to
rs
d
ec
la
re
d
a

d
iv
id
en
d
on
D
ec
em
be
r
1,
20
11
of
$
10
0
,0
0
0
p
ay
ab
le
to

sh
ar
eh
ol
d
er
s
of
re
co
rd
on
F
eb
1,
20
12
an
d
p
ay
ab
le
on
F
eb
29
,

20
12
.T
h
is
$
10
0
,0
0
0
go
es
d
ow
n
as
a
li
ab
il
it
y
on
th
e
fi
rm
‘s

ac
co
u
n
ti
n
g
sh
ee
t.

So
u
rc
e:
ht
tp
s:
//
w
w
w
.b
ou
n
d
le
ss
.c
om
/f
in
a
n
ce
/d
iv
id
en
d
s/
d
iv
id
en
d
–

p
ol
ic
y/
a
cc
ou
n
ti
n
g
-c
on
si
d
er
a
ti
on
s/

C
C
-B
Y
-S
A

B
ou
n
d
le
ss
is
a
n
op
en
ly
li
ce
n
se
d
ed
u
ca
ti
on
a
lr
es
ou
rc
e

80
3

Th
is
sh

ow
s
th
e
b
al
an

ce
sh

ee
t
fo
r
a
st
oc

k
d
iv
id
en

d
on

d
ec

la
ra
tio

n
d
at
e.

Fi
g
ur
e
15

.5
A
cc
ou
nt
in
g
fo
r
st
oc
k
d
iv
id
en
d
s

In
ve

st
or

P
re
fe
re
nc

es
Th

e
si
gn

i
ca

nc
e
of

in
ve

st
or
s’

d
iv
id
en

d
p
re
fe
re
nc

es
is

a
co

nt
es

te
d
to
p
ic

in
n

an
ce

th
at

ha
s
se

rio
us

im
p
lic
at
io
ns

fo
r
d
iv
id
en

d
p
ol
ic
y.

K
E
Y
P
O
IN
TS

•
E
le
m
en
ts
of
d
iv
id
en
d
p
ol
ic
y
in
cl
u
d
e:
p
ay
in
g
a
d
iv
id
en
d
vs

re
in
ve
st
m
en
t
in
co
m
p
an
y,
h
ig
h
vs
lo
w
p
ay
ou
t,
st
ab
le
vs

ir
re
gu
la
r
d
iv
id
en
d
s,
an
d
fr
eq
u
en
cy
of

p
ay
m
en
t.

•
So
m
e
ar
e
of
th
e
op
in
io
n
th
at
th
e
fu
tu
re
ga
in
s
ar
e
m
or
e
ri
sk
y

th
an
th
e
cu
rr
en
t
d
iv
id
en
d
s,
so
in
ve
st
or
s
p
re
fe
r
d
iv
id
en
d

p
ay
m
en
ts
ov
er
ca
p
it
al
ga
in
s.
O
th
er
s
co
n
te
n
d
th
at
d
iv
id
en
d

p
ol
ic
y
is
u
lt
im
at
el
y
ir
re
le
va
n
t,
si
n
ce
in
ve
st
or
s
ar
e
in
d
if
fe
re
n
t

be
tw
ee
n
se
ll
in
g
st
oc
k
an
d
re
ce
iv
in
g
d
iv
id
en
d
s.

•
A
ss
u
m
in
g
d
iv
id
en
d
re
le
va
n
ce
,c
om
in
g
u
p
w
it
h
a
d
iv
id
en
d

p
ol
ic
y
is
ch
al
le
n
gi
n
g
fo
r
th
e
fi
rm
s
be
ca
u
se
d
if
fe
re
n
t
in
ve
st
or
s

h
av
e
d
if
fe
re
n
t
vi
ew
s
on
p
re
se
n
t
ca
sh
d
iv
id
en
d
s
an
d
fu
tu
re

ca
p
it
al
ga
in
s.

•
Im
p
or
ta
n
ce
of
th
e
co
n
te
n
t
an
d
th
e
st
ab
il
it
y
of
a
d
iv
id
en
d

p
ol
ic
y
ar
e
su
bj
ec
t
to
m
u
ch
ac
ad
em
ic
d
eb
at
e.

T
h
e
ro
le
of
in
ve
st
or
p
re
fe
re
n
ce
s
fo
r
d
iv
id
en
d
s
an
d
th
e
va
lu
e
of
a

fi
rm
ar
e
p
ie
ce
s
of
th
e
d
iv
id
en
d
p
u
zz
le
,w
h
ic
h
is
th
e
su
bj
ec
t
of
m
u
ch

ac
ad
em
ic
d
eb
at
e.
A
ss
u
m
in
g
d
iv
id
en
d
re
le
va
n
ce
,c
om
in
g
u
p
w
it
h
a

d
iv
id
en
d
p
ol
ic
y
is
ch
al
le
n
gi
n
g
fo
r
th
e
d
ir
ec
to
rs
an
d
fi
n
an
ci
al

m
an
ag
er
of
a
co
m
p
an
y
be
ca
u
se
d
if
fe
re
n
t
in
ve
st
or
s
h
av
e
d
if
fe
re
n
t

vi
ew
s
on
p
re
se
n
t
ca
sh
d
iv
id
en
d
s
an
d
fu
tu
re
ca
p
it
al
ga
in
s.
In
ve
st
or

p
re
fe
re
n
ce
s
ar
e
fi
rs
t
sp
li
t
be
tw
ee
n
ch
oo
si
n
g
d
iv
id
en
d
p
ay
m
en
ts

n
ow
,o
r
fu
tu
re
ca
p
it
al
ga
in
s
in
li
eu
of
d
iv
id
en
d
s.
F
u
rt
h
er
el
em
en
ts
of

th
e
d
iv
id
en
d
p
ol
ic
y
al
so
in
cl
u
d
e:
1.
H
ig
h
ve
rs
u
s
lo
w
p
ay
ou
t,
2.
St
ab
le

ve
rs
u
s
ir
re
gu
la
r
d
iv
id
en
d
s,
an
d
3.
F
re
qu
en
cy
of
p
ay
m
en
t.
C
as
h

d
iv
id
en
d
s
p
ro
vi
d
e
li
qu
id
it
y,
bu
t
th
e
bo
n
u
s
sh
ar
e
w
il
lb
ri
n
g
ca
p
it
al

ga
in
s
to
th
e
sh
ar
eh
ol
d
er
s.
T
h
e
in
ve
st
or
’s
p
re
fe
re
n
ce
be
tw
ee
n
th
e

cu
rr
en
t
ca
sh
d
iv
id
en
d
an
d
th
e
fu
tu
re
ca
p
it
al
ga
in
h
as
be
en
vi
ew
ed
in

ki
n
d
.

M
an
y
p
eo
p
le
h
ol
d
th
e
op
in
io
n
th
at
th
e
fu
tu
re
ga
in
s
ar
e
m
or
e
ri
sk
y

th
an
th
e
cu
rr
en
t
d
iv
id
en
d
s,
as
th
e
“B
ir
d
-i
n
-t
h
e-
h
an
d
T
h
eo
ry
”

su
gg
es
ts
.T
h
is
vi
ew
is
su
p
p
or
te
d
by
bo
th
th
e
W
al
te
r
an
d
G
or
d
on

m
od
el
s,
w
h
ic
h
fi
n
d
th
at
in
ve
st
or
s
p
re
fe
r
th
os
e
fi
rm
s
w
h
ic
h
p
ay

re
gu
la
r
d
iv
id
en
d
s,
an
d
su
ch
d
iv
id
en
d
s
af
fe
ct

th
e
m
ar
ke

t
p
ri
ce
of
th
e

sh
ar
e.
G
or
d
on
‘s
d
iv
id
en
d
d
is
co
u
n
t
m
od
el
st
at
es
th
at
sh
ar
eh
ol
d
er
s

d
is
co
u
n
t
th
e
fu
tu
re
ca
p
it
al
ga
in
s
at
a
h
ig
h
er
ra
te
th
an
th
e
fi
rm
‘s

ea
rn
in
gs
,t
h
er
eb
y
ev
al
u
at
in
g
a
h
ig
h
er
va
lu
e
of
th
e
sh
ar
e.
In

sh
or

w
h
en
th
e
re
te
n
ti
on
ra
t

e
in
cr
ea

se
s,
th
ey
re
qu
ir
e
a
h
ig
h
er
d
is
co
u
n
ti
n
g

ra
te
.

In
co
n
tr
as
t,
ot
h
er
s
(s
ee
D
iv
id
en
d
Ir
re
le
va
n
ce
T
h
eo
ry
)
ar
gu
e
th
at
th
e

in
ve
st
or
s
ar
e
in
d
if
fe
re
n
t
be
tw
ee
n
d
iv
id
en
d
p
ay
m
en
ts
an
d
th
e
fu
tu
re

ca
p
it
al
ga
in
s.
T
h
er
ef
or
e,
th
e
co
n
te
n
t
of
a
fi
rm
‘s
d
iv
id
en
d
p
ol
ic
y
h
as

n
o
re
al
ef
fe
ct
on
th
e
va
lu
e
of
th
e
fi
rm
.

80
4

In
ve
st
or
p
re
fe
re
n
ce
s
p
la
y
an
u
n
ce
rt
ai
n
ro
le
in
th
e
“d
iv
id
en
d
p
u
zz
le
,”

w
h
ic
h
re
fe
rs
to
th
e
p
h
en
om
en
on
of
co
m
p
an
ie
s
th
at
p
ay
d
iv
id
en
d
s

be
in
g
re
w
ar
d
ed
by
in
ve
st
or
s
w
it
h
h
ig
h
er
va
lu
at
io
n
s,
ev
en
th
ou
gh

ac
co
rd
in
g
to
m
an
y
ec
on
om
is
ts
,i
t
sh
ou
ld
n
ot
m
at
te
r
to
in
ve
st
or
s

w
h
et
h
er
or
n
ot
a
fi
rm
p
ay
s
d
iv
id
en
d
s.
T
h
er
e
ar
e
a
n
u
m
be
r
of
fa
ct
or
s,

su
ch
as
p
sy
ch
ol
og
y,
ta
xe
s,
an
d
in
fo
rm
at
io
n
as
ym
m
et
ri
es
ti
ed
in
to

th
is
p
u
zz
le
,w
h
ic
h
fu
rt
h
er
co
m
p
li
ca
te
th
e
m
at
te
r
(F
ig
u
re
15
.6
).

So
u
rc
e:
ht
tp
s:
//
w
w
w
.b
ou
n
d
le
ss
.c
om
/f
in
a
n
ce
/d
iv
id
en
d
s/
d
iv
id
en
d
–

p
ol
ic
y/
in
ve
st
or
-p
re
fe
re
n
ce
s/

C
C
-B
Y
-S
A

B
ou
n
d
le
ss
is
a
n
op
en
ly
li
ce
n
se
d
ed
u
ca
ti
on
a
lr
es
ou
rc
e

S
to
ck

D
iv
id
en

d
s
ve

rs
us

C
as

h
D
iv
id
en

d
s

In
ve

st
or
s’

p
re
fe
re
nc

e
fo
r
st
oc

k
or

ca
sh

d
ep

en
d
s
on

th
ei
r

in
cl
in
at
io
ns

to
w
ar
d
fa
ct
or
s
su

ch
as

liq

ui
d
ity

,t
ax

si
tu
at
io
n,

an
d
e

xi
b
ili
ty
.

K
E
Y
P
O
IN
TS

•
C
as
h
d
iv
id
en
d
s
p
ro
vi
d
e
st
ea
d
y
p
ay
m
en
ts
of
ca
sh
th
at
ca
n
be

u
se
d
to
re
in
ve
st
i

n
a
co

m
p
an
y,
if
th
e
sh
ar
eh
ol
d
er
d
es
ir

es
.

•
H
ol
d
er
s
of
st
oc
k
d
iv
id
en
d
s
ca
n
se
ll
th
ei
r
st
oc
k
fo
r
(h
op
ef
u
ll
y)

h
ig
h
ca
p
it
al
ga
in
s
in
th
e
fu
tu
re
,o
r
th
ey
ca
n
se
ll
it
of
f

im
m
ed
ia
te
ly
to
ge
t
ca
sh
,m
u
ch
li
ke

a
ca

sh
d
iv
id
en
d
.T
h
is

fl
ex
ib
il
it
y
is
se
en
by
so

m
e
as

a
be
n
ef
it
of

st
oc
k
d
iv
id
en
d
.

•
C
as
h
d
iv
id
en
d
s
ar
e
im
m
ed
ia
te
ly
ta
xa
bl
e
as
in
co
m
e,
w
h
il
e

st
oc
k
d
iv
id
en
d
s
ar
e
on
ly
ta
xe
d
w
h
en
th
ey
ar
e
ac
tu
al
ly
so
ld
by

th
e
sh
ar
eh
ol
d
er
.

•
If
an
in
ve
st
or
is
in
te
re
st
ed
in
lo
n
g-
te
rm
ca
p
it
al
ga
in
s,
h
e
or

sh
e
w
il
ll
ik
el
y
p
re
fe
r
st
oc
k
d
iv
id
en
d
s.
If
an
in
ve
st
or
n
ee
d
s
a

re
gu
la
r
so
u
rc
e
of
in
co
m
e,
ca
sh
d
iv
id
en
d
s
w
il
lp
ro
vi
d
e

li
qu
id
it
y.

•
F
ir
m
s
ca
n
ch
oo
se
to
is
su
e
st
oc
k
d
iv
id
en
d
s
if
th
ey
w
ou
ld
li
ke

to
d
ir
ec
t
th
ei
r
ea
rn
in
gs
to
w
ar
d
th
e
d
ev
el
op
m
en
t
of
th
e
fi
rm

bu
t
w
ou
ld
st
il
ll
ik
e
to
ap
p
ea
se
st
oc
kh
ol
d
er
s
w
it
h
so
m
e
fo
rm
of

p
ay
m
en
t.

80
5

In
ve

st
m
en

t
p
re
fe
re
nc

es
ar
e

sp
lit

b
et
w
ee

n
ch

oo
si
ng

d
iv
id
en

d
p
ay

ou
ts

or
fu
tu
re

ca
p
ita

lg
ai
ns

Fi
g
ur
e
15

.6
S
to
ck

m
ar
ke
t

K
E
Y
P
O
IN
TS

(c
on
t.
)

•
E
st
ab
li
sh
ed
fi
rm
s
w
it
h
li
tt
le
m
or
e
ro
om
to
gr
ow
d
o
n
ot
h
av
e

p
re
ss
in
g
n
ee
d
s
fo
r
al
lt
h
ei
r
ca
sh
ea
rn
in
gs
,s
o
th
ey
ar
e
m
or
e

li
ke
ly
to
gi
ve
ca
sh
d
iv
id
en
d
s.

If
a
fi
rm
d
ec
id
es
to
p
ar
ce
lo
u
t

d
iv
id
en
d
s
to
sh
ar
eh
ol
d
er
s,
th
ey

h
av
e
a
ch
oi
ce
in
th
e
fo
rm
of

p
ay
m
en
t:
ca
sh
or
st
oc
k.
C
as
h

d
iv
id
en
d
s
ar
e
th
os
e
p
ai
d
ou
t
in

cu
rr
en
cy
,u
su
al
ly
vi
a
el
ec
tr
on
ic

fu
n
d
s
tr
an
sf
er
or
by
p
ap
er

ch
ec
k.
T
h
is
is
th
e
m
os
t
co
m
m
on

m
et
h
od
of
sh
ar
in
g
co
rp
or
at
e

p
ro
fi
ts
w
it
h
th
e
sh
ar
eh
ol
d
er
s
of

co
m
p
an
y.

St
oc
k
or
sc
ri
p
d
iv
id
en
d
s
ar
e
th
os
e
p
ai
d
ou
t
in
th
e
fo
rm

of
ad
d
it
io
n
al
st
oc
k
sh
ar
es
of
ei
th
er
th
e
is
su
in
g
co
rp
or
at
io
n
or

an
ot
h
er
co
rp
or
at
io
n
.C
as
h
d
iv
id
en
d
s
p
ro
vi
d
e
in
ve
st
or
s
w
it
h
a

re
gu
la
r
st
re
am
of
in
co
m
e.
St
oc
k
d
iv
id
en
d
s,
u
n
li
ke
ca
sh
d
iv
id
en
d
s,

d
o
n
ot
p
ro
vi
d
e
li
qu
id
it
y
to
th
e
in
ve
st
or
s;
h
ow
ev
er
,t
h
ey
d
o
en
su
re

ca
p
it
al
ga
in
s
to
th
e
st
oc
kh
ol
d
er
s.
T
h
er
ef
or
e,
if
in
ve
st
or
s
ar
e
n
ot

in
te
re
st
ed
in
a
lo
n
g-
te
rm
in
ve
st
m
en
t,
th
ey
w
il
lp
re
fe
r
re
gu
la
r
ca
sh

p
ay
m
en
ts
ov
er
p
ay
m
en
ts
of
ad
d
it
io
n
al
st
oc
k
(F
ig
u
re
15
.7
).

C
os
ts
of
ta
xe
s
ca
n
al
so
p
la
y
a
ro
le
in
ch
oo
si
n
g
be
tw
ee
n
ca
sh
or
st
oc
k

d
iv
id
en
d
s.
C
as
h
d
iv
id
en
d
s
ar
e
im
m
ed
ia
te
ly
ta
xa
bl
e
u
n
d
er
m
os
t

co
u
n
tr
ie
s’
ta
x
co
d
es
as
in
co
m
e,

w
h
il
e
st
oc
k
d
iv
id
en
d
s
ar
e
n
ot

ta
xa
bl
e
u
n
ti
ls
ol
d
fo
r
ca
p
it
al
ga
in
s
(i
fs
to
ck

w
as

th
e
on
ly
ch
oi
ce
fo
r

re
ce
iv
in
g
d
iv
id
en
d
s)
.T
h
is
ca
n
be
se
en
as
a
h
u
ge
be
n
ef
it
of
st
oc
k

d
iv
id
en
d
s,
p
ar
ti
cu
la
rl
y
fo
r
in
ve
st
or
s
of
a
h
ig
h
in
co
m
e
ta
x
br
ac
ke
t.
A

fu
rt
h
er
be
n
ef
it
of
th
e
st
oc
k
d
iv
id
en
d
is
it
s
p
er
ce
iv
ed
fl
ex
ib
il
it
y.

Sh
ar
eh
ol
d
er
s
h
av
e
th
e
ch
oi
ce
of
ei
th
er
ke
ep
in
g
th
ei
r
sh
ar
es
in
h
op
es

of
h
ig
h
ca
p
it
al
ga
in
s,
or
se
ll
in
g
so
m
e
of
th
e
n
e

w
sh

ar
es
fo
r
ca

sh
,

w
h
ic
h
is
so
m
ew
h
at
li
ke
re
ce
iv
in
g
a
ca
sh
d
iv
id
en
d
.

If
th
e
p
ay
m
en
t
of
st
oc
k
d
iv
id
en
d
s
in
vo
lv
es
th
e
is
su
in
g
of
n
ew

sh
ar
es
,i
t
in
cr
ea
se
s
th
e
to
ta
ln
u
m
be
r
of
sh
ar
es
w
h
il
e
lo
w
er
in
g
th
e

p
ri
ce
of
ea
ch
sh
ar
e
w
it
h

ou
t
ch

an
gi
n
g
th
e
m
ar
ke
t
ca
p
it
al
iz
at
io
n
of

th
e
sh
ar
es
h
el
d
.I
t
h
as
th
e
sa
m
e
ef
fe
ct
as
a
st
oc

k
sp

li
t:
th
e
to
ta
lv
al
u
e

of
th
e
fi
rm
is
n
ot
af
fe
ct
ed
.I
ft
h
e
p
ay
m
en
t
in
vo
lv
es
th
e
is
su
in
g
of

n
ew
sh
ar
es
,i
t
in
cr
ea
se
s
th
e
to
ta
ln
u
m
be
r
of
sh
ar
es
w
h
il
e
lo
w
er
in
g

th
e
p
ri
ce
of
ea
ch
sh
ar
e
w
it
h
ou
t
ch
an
gi
n
g
th
e
m
ar
ke
t
ca
p
it
al
iz
at
io
n
,

or
to
ta
lv
al
u
e,
of
th
e
sh
ar
es
h
el
d
.A
s
su
ch
,r
ec
ei
vi
n
g
st
oc
k
d
iv
id
en
d
s

d
oe
s
n
ot
in
cr
ea
se
a
sh
ar
eh
ol
d
er
‘s
st
ak
e
in
th
e
fi
rm
;b
y
co
n
tr
as
t,
a

sh
ar
eh
ol
d
er
re
ce
iv

in
g
ca

sh
d
iv
id
en
d
s
co
u
ld
u
se
th
at
in
co
m
e
to

re
in
ve
st
in
th
e
fi
rm
an
d
in
cr
ea
se
th
ei
r
st
ak
e.

F
or
th
e
fi
rm
,d
iv
id
en
d
p
ol
ic
y
d
ir
ec
tl
y
re
la
te
s
to
th
e
ca
p
it
al
st
ru
ct
u
re

of
th
e
fi
rm
,s
o
ch
oo
si
n
g
be
tw
ee
n
st
oc
k
d
iv
id
en
d
s
an
d
ca
sh
d
iv
id
en
d
s

80
6

W
he

n
ch

oo
si
ng

b
et
w
ee

n
ca

sh
or

st
oc

k
d
iv
id
en

d
s,

th
e
tr
ad

e-
o

is
b
et
w
ee

n
liq

ui
d
ity

in
th
e
sh

or
t-
te
rm

r
in
co

m
e

fr
om

ca
p
ita

lg
ai
ns

in
th
e
lo
ng

-t
er
m
.

Fi
g
ur
e
15

.7
In
co
m
e
fr
om

D
iv
id
en
d
s

is
an
im
p
or
ta
n
t
co
n
si
d
er
at
io
n
.A
fi
rm
th
at
is
st
il
li
n
it
s
st
ag
es
of

gr
ow
th
w
il
lm
os
t
li
ke
ly
p
re
fe
r
to
re
ta
in
it
s
ea
rn
in
gs
an
d
p
u
t
th
em

to
w
ar
d
fi
rm
d
ev
el
op
m
en
t,
in
st
ea
d
of
se
n
d

in
g
th
em

to
th
ei
r

sh
ar
eh
ol
d
er
s.
T
h
e
fi
rm
co
u
ld
al
so
ch
oo
se
to
ap
p
ea
se
in
ve
st
or
s
w
it
h

st
oc
k
d
iv
id
en
d
s,
w
h
ic
h
w
ou
ld
st
il
la
ll
ow
it
to
re
ta
in
it
s
ea
rn
in
gs
.

C
on
ve
rs
el
y,
a
fi
rm
th
at
is
al
re
ad
y
qu
it
e
st
ab
le
w
it
h
lo
w
gr
ow
th
is

m
u
ch
m
or
e
li
ke
ly
to
ch
oo
se
p
ay
m
en
t
of
d
iv
id
en
d
s
in
ca
sh
.T
h
e

n
ee
d
s
an
d
ca
sh
fl
ow
of
th
e
fi
rm
ar
e
n
ec
es
sa
ry
p
oi
n
ts
of

co
n
si
d
er
at
io
n
in
ch
oo
si
n
g
a

d
iv
id
en
d
p
ol
ic
y.

So
u
rc
e:
ht
tp
s:
//
w
w
w
.b
ou
n
d
le
ss
.c
om
/f
in
a
n
ce
/d
iv
id
en
d
s/
d
iv
id
en
d
–

p
ol
ic
y/
st
oc
k-
d
iv
id
en
d
s-
ve
rs
u
s-
ca

sh
-d
iv
id
en

d
s/

C
C
-B
Y
-S
A

B
ou
n
d
le
ss
is
a
n
op
en
ly
li
ce
n
se
d
ed
u
ca
ti
on
a
lr
es
ou
rc
e

S
ig
na

lin
g

D
iv
id
en

d
d
ec

is
io
ns

ar
e
fr
eq

ue
nt
ly

se
en

b
y
in
ve

st
or
s
as

re
ve

al
in
g
in
fo
rm

at
io
n
ab

ou
t
a
r
m
‘s

p
ro
sp

ec
ts
;t
he

re
fo
re

r
m
s
ar
e
ca

ut
io
us

w
ith

th
es

e
d
ec

is
io
ns

K
E
Y
P
O
IN
TS

•
Si
gn
al
in
g
is
th
e
id
ea
th
at
on
e
ag
en
t
co
n
ve
ys
so
m
e

in
fo
rm
at
io
n
ab
ou
t
it
se
lf
to
an
ot
h
er
p
ar
ty
th
ro
u
gh
an
ac
ti
on
.I
t

to
ok
ro
ot
in
th
e
id
ea
of
as
ym
m
et
ri
c
in
fo
rm
at
io
n
;i
n
th
is

ca
se

m
an
ag
er
s
kn
ow

m
or
e
th
an

in
ve
st
or
s,
so
in
ve
st
or
s
w
il
lf
in
d

“s
ig
n
al
s”
in
th
e
m
an
ag
er
s’
ac
ti
on
s
to
ge
t
cl
u
es
ab
ou
t
th
e
fi
rm
.

•
F
or
in
st
an
ce
,w
h
en
m
an
ag
er
s
la
ck
co
n
fi
d
en
ce
in
th
e
fi
rm
‘s

ab
il
it
y
to
ge
n
er
at
e
ca
sh
fl
ow
s
in
th
e
fu
tu
re
th
ey
m
ay
ke
ep

d
iv
id
en
d
s
co
n
st
an
t,
or
p
os
si
bl
y
ev
en
re
d
u
ce
th
e
am
ou
n
t
of

d
iv
id
en
d
s
p
ai
d
ou
t.
In
ve
st
or
s
w
il
ln
ot
ic
e
th
is
an
d
ch
oo
se
to

ll
th
ei
r
sh

ar
e
of
th
e
fi
rm
.

•
In
ve
st
or
s
ca
n
u
se
th
is
kn
ow
le
d
ge
ab
ou
t
si
gn
al
to
in
fo
rm
th
ei
r

d
ec
is
io
n
to
bu
y
or
se
ll
th
e
fi
rm
‘s
st
oc
k,
bi
d
d
in
g
th
e
p
ri
ce
u
p
in

th
e
ca
se
of
a
p
os
it
iv
e
d
iv
id
en
d
su
rp
ri
se
,o
r
se
ll
in
g
it
d
ow
n

w
h
en
d
iv
id
en
d
s
d
o
n
ot
m
ee
t
ex
p
ec
ta
ti
on
s.

•
F
ir
m
s
ar
e
aw
ar
e
of
th
is
si
gn
al
in
g
ef
fe
ct
,s
o
th
ey
w
il
lt
ry
n
ot
to

se
n
d
a
n
eg
at
iv
e
si
gn
al
th
at
se
n
d
s
th
ei
r
st
oc
k
p
ri
ce
d
ow
n
.

80
7

A
d
iv
id
en
d
d
ec
is
io
n
m
ay
h
av
e
an
in
fo
rm
at
io
n
si
gn
al
in
g
ef
fe
ct
th
at

fi
rm
s
w
il
lc
on
si
d
er
in
fo
rm
u
la
ti
n
g
th
ei
r
p
ol
ic
y.
T
h
is
te
rm
is
d
ra
w
n

fr
om
ec
on
om
ic
s,
w
h
er
e
si
gn
al
in
g
is
th
e
id
ea
th
at
on
e
ag
en
t
co
n
ve
ys

so
m
e
in
fo
rm
at
io
n
ab
ou
t
it
se
lf
to
an
ot
h
er
p
ar
ty
th
ro
u
gh
an
ac
ti
on
.

Si
gn
al
in
g
to
ok
ro
ot
in
th
e
id
ea
of
as
ym
m
et
ri
c
in
fo
rm
at
io
n
,w
h
ic
h

sa
ys
th
at
in
so
m
e
ec
on
om
ic
tr
an
sa
ct
io
n
s,
in
eq
u
al
it
ie
s
in
ac
ce
ss
to

in
fo
rm
at
io
n
u
p
se
t
th
e
n
or
m
al
m
ar
ke
t
fo
r
th
e
ex
ch
an
ge
of
go
od
s
an
d

se
rv
ic
es
(F
ig
u
re
15
.8
).
A
n
in
fo
rm
at
io
n
as
ym
m
et
ry
ex
is
ts
if
fi
rm

m
an
ag
er
s
kn
ow
m
or
e
ab
ou
t
th
e
fi
rm
an
d
it
s
fu
tu
re
p
ro
sp
ec
ts
th
an

th
e
in
ve
st
or
s.

W
h
en
in
ve
st
or
s
h
av
e
in
co
m
p
le
te
in
fo
rm
at
io
n
ab
ou
t
th
e
fi
rm

(p
er
h
ap
s
d
u
e
to
op
aq
u
e
ac
co
u
n
ti
n
g
p
ra
ct
ic
es
)
th
ey
w
il
ll
oo
k
fo
r

ot
h
er
in
fo
rm
at
io
n
in
ac
ti
on
s
li
ke
th
e
fi
rm
‘s
d
iv
id
en
d
p
ol
ic
y.
F
or

in
st
an
ce
,w
h
en
m
an
ag
er
s
la
ck
co
n
fi
d
en
ce
in
th
e
fi
rm
‘s
ab
il
it
y
to

ge
n
er
at
e
ca
sh
fl
ow
s
in
th
e
fu
tu
re
th
ey
m
ay
ke
ep
d
iv
id
en
d
s
co
n
st
an
t,

or
p
os
si
bl
y
ev
en
re
d
u
ce
th
e
am
ou
n
t
of
d
iv
id
en
d
s
p
ai
d
ou
t.

C
on
ve
rs
el
y,
m
an
ag
er
s
th
at
h
av
e
ac
ce
ss
to
in
fo
rm
at
io
n
th
at
in
d
ic
at
es

ve
ry
go
od
fu
tu
re
p
ro
sp
ec
ts
fo
r
th
e
fi
rm
(e
.g
.a
fu
ll
or
d
er
bo
ok
)
ar
e

m
or
e
li
ke
ly
to
in
cr
ea
se
d
iv
id
en
d
s.

In
ve
st
or
s
ca
n
u
se
th
is
kn
ow
le
d
ge
ab
ou
t
m
an
ag
er
s’
be
h
av
io
r
to

in
fo
rm
th
ei
r
d
ec
is
io
n
to
bu
y
or
se
ll
th
e
fi
rm
‘s
st
oc
k,
bi
d
d
in
g
th
e

p
ri
ce
u
p
in
th
e
ca
se
of
a
p
os
it
iv
e
d
iv
id
en
d
su
rp
ri
se
,o
r
se
ll
in
g
it

d
ow
n
w
h
en
d
iv
id
en
d
s
d
o
n
ot
m
ee
t
ex
p
ec
ta
ti
on
s.
T
h
is
,i
n
tu
rn
,m
ay

in
fl
u
en
ce
th
e
d
iv
id
en
d
d
ec
is
io
n
as
m
an
ag
er
s
kn
ow
th
at
st
oc
k

h
ol
d
er
s
cl
os
el
y
w
at
ch
d
iv
id
en
d
an
n
ou
n
ce
m
en
ts
lo
ok
in
g
fo
r
go
od
or

ba
d
n
ew
s.
A
s
m
an
ag
er
s
te
n
d
to
av
oi
d
se
n
d
in
g
a
n
eg
at
iv
e
si
gn
al
to

th
e
m
ar
ke
t
ab
ou
t
th
e
fu
tu
re
p
ro
sp
ec
ts
of
th
ei
r
fi
rm
,t
h
is
al
so
te
n
d
s

80
8

A
m
od

el
d
ev

el
op

ed
b
y
M
er
to
n
M
ill
er

an
d
K
ev

in
R
oc

k
in

19
85

su
gg

es
ts

th
at

d
iv
id
en

d
an

no
un

ce
m
en

ts
co

nv
ey

in
fo
rm

at
io
n
to

in
ve

st
or
s
re
ga

rd
in
g
th
e
r
m
‘s

fu
tu
re

p
ro
sp

ec
ts
.M

an
y
ea

rli
er

st
ud

ie
s
ha

d
sh

ow
n
th
at

st
oc

k
p
ric

es
te
nd

to
in
cr
ea

w
he

n
an

in
cr
ea

se
in

d
iv
id
en

d
s
is
an

no
un

ce
d
an

d
te
nd

to
d
ec

re
as

e
w
he

n
a

d
ec

re
as

e
or

om
is
si
on

is
an

no
un

ce
d
.M

ill
er

an
d
R
oc

k
p
oi
nt
ed

ou
t
th
at

th
is
is
lik
el
y

d
ue

to
th
e
in
fo
rm

at
io
n
co

nt
en

t
of

d
iv
id
en

d
s.

Fi
g
ur
e
15

.8
A
co
m
p
an
y’
s
d
iv
id
en
d
d
ec
is
io
n
m
ay

si
gn
al
w
ha
t
m
an
ag
em

en
t

b
el
ie
ve
s
is
th
e
fu
tu
re
p
ro
sp
ec
ts
of
th
e
r
m
an
d
its

st
oc
k
p
ric
e.

to
le
ad
to
a
d
iv
id
en
d
p
ol
ic
y
of
a
st
ea
d
y,
gr
ad
u
al
ly
in
cr
ea
si
n
g

p
ay
m
en
t.

So
u
rc
e:
ht
tp
s:
//
w
w
w
.b
ou
n
d
le
ss
.c
om
/f
in
a
n
ce
/d
iv
id
en
d
s/
d
iv
id
en
d
–

p
ol
ic
y/
si
g
n
a
li
n
g
/

C
C
-B
Y
-S
A

B
ou
n
d
le
ss
is
a
n
op
en
ly
li
ce
n
se
d
ed
u
ca
ti
on
a
lr
es
ou
rc
e

C
lie
nt
el
e

C
ha

ng
e
in

a
r
m
‘s

d
iv
id
en

d
p
ol
ic
y
m
ay

ca
us

e
lo
ss

of
ol
d
cl
ie
nt
el
e
an

d
ga

in
of

ne
w

cl
ie
nt
el
e,

b
as

ed
on

th
ei
r

d
i
er
en

t
d
iv
id
en

d
p
re
fe
re
nc

es
.

K
E
Y
P
O
IN
TS

•
T
h
e
cl
ie
n
te
le
ef
fe
ct
is
th
e
id
ea
th
at
th
e
ty
p
e
of
in
ve
st
or
s

at
tr
ac
te
d
to
a
p
ar
ti
cu
la
r
ki
n
d
of
se
cu
ri
ty
w
il
la
ff
ec
t
th
e
p
ri
ce
of

th
e
se
cu
ri
ty
w
h
en
p
ol
ic
ie
s
or
ci
rc
u
m
st
an
ce
s
ch
an
ge
.

•
C
u
rr
en
t
cl
ie
n
te
le
m
ig
h
t
ch
oo
se
to
se
ll
th
ei
r
st
oc
k
if
a
fi
rm

ch
an
ge
s
th
ei
r
d
iv
id
en
d
p
ol
ic
y
an
d
d
ev
ia
te
s
co
n
si
d
er
ab
ly
fr
om

th
e
in
ve
st
or
‘s
p
re
fe
re
n
ce
s.
C
h
an
ge
s
in
p
ol
ic
y
ca
n
al
so
le
ad
to

n
ew
cl
ie
n
te
le
,w
h
os
e
p
re
fe
re
n
ce
s
al
ig
n
w
it
h
th
e
fi
rm
‘s
n
ew

d
iv
id
en
d
p
ol
ic
y.

•
In
eq
u
il
ib
ri
u
m
,t
h
e
ch
an
ge
s
in
cl
ie
n
te
le
se
ts
w
il
ln
ot
le
ad
to

an
y
ch
an
ge
in
st
oc
k
p
ri
ce
.

•
T
h
e
re
al
w
or
ld
im
p
li
ca
ti
on
of
th
e
cl
ie
n
te
le
ef
fe
ct
li
es
in
th
e

im
p
or
ta
n
ce
of
d
iv
id
en
d
p
ol
ic
y
st
ab
il
it
y,
ra
th
er
th
an
th
e

co
n
te
n
t
of
th
e
p
ol
ic
y
it
se
lf
.

T
h
e
C
li
e
n
te
le
E
ff
e
ct

T
h
e
cl
ie
n
te
le
ef
fe
ct
is
th
e
id
ea
th
at
th
e
ty
p
e
of
in
ve
st
or
s
at
tr
ac
te
d
to

a
p
ar
ti
cu
la
r
ki
n
d
of
se
cu
ri
ty
w
il
la
ff
ec
t
th
e
p
ri
ce
of
th
e
se
cu
ri
ty
w
h
en

p
ol
ic
ie
s
or
ci
rc
u
m
st
an
ce
s
ch
an
ge
.T
h
es
e
in
ve
st
or
s
ar
e
kn
ow
n
as

80
9

d
iv
id
e
n
d
cl
ie
n
te
le
.F
or
in
st
an
ce
,s
om
e
cl
ie
n
te
le
w
ou
ld
p
re
fe
r
a

co
m
p
an
y
th
at
d
oe
sn
‘t
p
ay
d
iv
id
en
d
s
at
al
l,
bu
t
in
st
ea
d
in
ve
st
s
th
ei
r

re
ta
in
ed
ea
rn
in
gs
to
w
ar
d
gr
ow
in
g
th
e
bu
si
n
es
s.
So
m
e
w
ou
ld
in
st
ea
d

p
re
fe
r
th
e
re
gu
la
r
in
co
m
e
fr
om
d
iv
id
en
d
s
ov
er
ca
p
it
al
ga
in
s.
O
f

th
os
e
w
h
o
p
re
fe
r
d
iv
id
en
d
s
ov
er
ca
p
it
al
ga
in
s,
th
er
e
ar
e
fu
rt
h
er

su
bs
et
s
of
cl
ie
n
te
le
;f
or
ex
am
p
le
,i
n
ve
st
or
s
m
ig
h
t
p
re
fe
r
a
st
oc
k
th
at

p
ay
s
a
h
ig
h
d
iv
id
en
d
,w
h
il
e
an
ot
h
er
su
bs
et
m
ig
h
t
lo
ok
fo
r
a
ba
la
n
ce

be
tw
ee
n
d
iv
id
en
d
p
ay
ou
t
an
d
re
in
ve
st
m
en
t
in
th
e
co
m
p
an
y
(F
ig
u
re

15
.9
).

C
li
en
te
le
m
ay
ch
oo
se
to
se
ll
th
ei
r
st
oc
k
if
a
fi
rm
ch
an
ge
s
it
s
d
iv
id
en
d

p
ol
ic
y,
an
d
d
ev
ia
te
s
co
n
si
d
er
ab
ly
fr
om
it
s
p
re
fe
re
n
ce
s.
O
n
th
e
ot
h
er

h
an
d
,t
h
e
fi
rm
m
ay
at
tr
ac
t
a
n
ew
cl
ie
n
te
le
gr
ou
p
if
it
s
n
ew
d
iv
id
en
d

p
ol
ic
y
ap
p
ea
ls
to
th
e
gr
ou
p
‘s
d
iv
id
en
d
p
re
fe
re
n
ce
s.
T
h
es
e
ch
an
ge
s
in

d
em
og
ra
p
h
ic
s
re
la
te
d
to
a
st
oc
k’
s
ow
n
er
sh
ip
d
u
e
to
a
ch
an
ge
of

d
iv
id
en
d
p
ol
ic
y
ar
e
ex
am
p
le
s
of
th
e
“c
li
en
te
le
ef
fe
ct
.”

T
h
is
th
eo
ry
is
re
la
te
d
to
th
e
d
iv
id
en
d
ir
re
le
va
n
ce
th
eo
ry
p
re
se
n
te
d

by
M
od
ig
li
an
ia
n
d
M
il
le
r,
w
h
ic
h
st
at
es
th
at
,u
n
d
er
p
ar
ti
cu
la
r

as
su
m
p
ti
on
,a
n
in
ve
st
or
’s
re
qu
ir
ed
re
tu
rn
an
d
th
e
va
lu
e
of
th
e
fi
rm

ar
e
u
n
re
la
te
d
to
th
e
fi
rm
‘s
d
iv
id
en
d
p
ol
ic
y.
A
ft
er
al
l,
cl
ie
n
te
le
ca
n

ju
st
ch
oo
se
to
se
ll
of
ft
h
ei
r
h
ol
d
in
gs
if
th
ey
d
is
li
ke
a
fi
rm
‘s
p
ol
ic
y

ch
an
ge
,a
n
d
th
e
fi
rm
m
ay
si
m
u
lt
an
eo
u
sl
y
at
tr
ac
t
a
n
ew
su
bs
et
of

cl
ie
n
te
le
w
h
o
li
ke
th
e
p
ol
ic
y
ch
an
ge
.T
h
er
ef
or
e,
st
oc
k
va
lu
e
is

u
n
af
fe
ct
ed
.T
h
is
is
tr
u
e
as
lo
n
g
as
th
e
“m
ar
ke
t”
fo
r
d
iv
id
en
d
p
ol
ic
y
is

in
eq
u
il
ib
ri
u
m
,w
h
er
e
d
em
an
d
fo
r
su
ch
a
p
ol
ic
y
m
ee
ts
th
e
su
p
p
ly
.

T
h
e
cl
ie
n
te
le
ef
fe
ct
‘s
re
al
w
or
ld
im
p
li
ca
ti
on
is
th
at
w
h
at
m
at
te
rs
is

n
ot
th
e
co
n
te
n
t
of
th
e
d
iv
id
en
d
p
ol
ic
y,
bu
t
ra
th
er
th
e
st
ab
il
it
y
of
th
e

p
ol
ic
y.
W
h
il
e
in
ve
st
or
s
ca
n
al
w
ay
s
ch
oo
se
to
se
ll
sh
ar
es
of
fi
rm
s

w
it
h
u
n
d
es
ir
ab
le
d
iv
id
en
d
p
ol
ic
y,
an
d
bu

y
sh

ar
es
of
fi
rm
s
w
it
h

at
tr
ac
ti
ve
d
iv
id
en
d
p
ol
ic
y,
th
er
e
ar
e
br
ok
er
ag
e
co
st
s
an
d
ta
x

co
n
si
d
er
at
io
n
s
as
so
ci
at
ed
w
it
h
th
is
.A
s
a
re
su
lt
,a
n
in
ve
st
or
m
ay

st
ic
k
w
it
h
a
st
oc
k
th
at
h
as
a
su
b-
op
ti
m
al
d
iv
id
en
d
p
ol
ic
y
be
ca
u
se
th
e

co
st
of
sw
it
ch
in

g
in
ve

st
m
en
ts
ou
tw
ei
gh
s
th
e
be
n
ef
it
th
e
in
ve
st
or

w
ou
ld
re
ce
iv
e
by
in
ve
st
in
g
in
a
st
oc
k
w
it
h
a
be
tt
er
d
iv
id
en
d
p
ol
ic
y.

A
lt
h
ou
gh
co
m
m
on
ly
u
se
d
in
re
fe
re
n
ce
to
d
iv
id
en
d
or
co
u
p
on

(i
n
te
re
st
)
ra
te
s,
th
e
cl
ie
n
te
le
ef
fe
ct
ca
n
al
so
be
u
se
d
in
th
e
co
n
te
xt
of

81
0

R
et
ire

es
ar
e
m
or
e
lik
el
y
to

p
re
fe
r

hi
gh

d
iv
id
en

d
p
ay

ou
ts

ov
er

ca
p
ita

lg
ai
ns

si
nc

e
th
is
p
ro
vi
d
es

th
em

w
ith

ca
sh

in
co

m
e.

Th
er
ef
or
e,

if
a
co

m
p
an

y
d
is
co

nt
in
ue

d
p
ay

in
g
d
iv
id
en

d
s,

th
e
cl
ie
nt
el
e
e

ec
t
m
ay

ca
us

e
re
tir
ee

sh
ar
eh

ol
d
er
s
to

se
ll
th
e

st
oc

k
in

fa
vo

r
of

ot
he

r
in
co

m
e

ge
ne

ra
tin

g
in
ve

st
m
en

ts
.

Fi
g
ur
e
15

.9
C
lie
nt
el
e
Ty
p
e

E
xa
m
p
le

le
ve
ra
ge
(d
eb
t
le
ve
ls
),
ch
an
ge
s
in
li
n
e
of
bu
si
n
es
s,
ta
xe
s,
an
d
ot
h
er

m
an
ag
em
en
t
d
ec
is
io
n
s.

E
X
A
M
P
LE

Su
p
p
os
e
F
ir
m
A
h
ad
be
en
in
a
gr
ow
th
st
ag
e
an
d
d
id
n
ot
of
fe
r

d
iv
id
en
d
s
to
it
s
sh
ar
eh
ol
d
er
s,
bu
t
th
ei
r
p
ol
ic
y
ch
an
ge
d
to

p
ay
in
g
lo
w
ca
sh
d
iv
id
en
d
s.
C
li
en
te
le
in
te
re
st
ed
in
lo
n
g
te
rm

ca
p
it
al
ga
in
s
m
ig
h
t
be
al
ar
m
ed
,i
n
te
rp
re
ti
n
g
th
is
d
ec
is
io
n
as
a

si
gn
of
sl
ow
in
g
gr
ow
th
,w
h
ic
h
w
ou
ld
m
ea
n
le
ss
st
oc
k
p
ri
ce

ap
p
re
ci
at
io
n
in
th
e
fu
tu
re
.T
h
is
se
t
of
cl
ie
n
te
le
co
u
ld
ch
oo
se
to

se
ll
th
e
st
oc
k.
O
n
th
e
ot
h
er
h
an
d
,d
iv
id
en
d
p
ay
m
en
ts
co
u
ld

ap
p
ea
lt
o
in
ve
st
or
s
w
h
o
ar
e
in
te
re
st
ed
in
re
gu
la
r
ad
d
it
io
n
al

in
co
m
e
fr
om
th
e
in
ve
st
m
en
t,
an
d
th
ey
w
ou
ld
bu
y
F
ir
m
A
‘s

st
oc
k.

So
u
rc
e:
ht
tp
s:
//
w
w
w
.b
ou
n
d
le
ss
.c
om
/f
in
a
n
ce
/d
iv
id
en
d
s/
d
iv
id
en
d
–

p
ol
ic
y/
cl
ie
n
te
le
/

C
C
-B
Y
-S
A

B
ou
n
d
le
ss
is
a
n
op
en
ly
li
ce
n
se
d
ed
u
ca
ti
on
a
lr
es
ou
rc
e

81
1

S
et
tin

g
th
e
Ta

rg
et

P
ay

ou
t
R
at
io

R
es

id
ua

lD
iv
id
en

d
M
od

M
et
ho

d
of

P
ay

m
en

Se
ct
io
n
3

S
et
tin

g
th
e
D
iv
id
en

81
2

ht
tp
s:
//
w
w
w
.b
ou

nd
le
ss
.c
om

/
na

nc
e/
d
iv
id
en

d
s/
se

tt
in
g-
th
e-
d
iv
id
en

d
/

S
et
tin

g
th
e
Ta
rg
et

P
ay

ou
t

R
at
io

C
om

p
an

ie
s
d
et
er
m
in
e
w
ha

t
ki
nd

of
in
ve

st
or

s
th
ey

w
an

t
to

at
tr
ac

t
an

d
th
e
in
ve

st
m
en

t
op

p
or
tu
ni
tie

s
th
ey

fa
ce

b
ef
or
e
se

tt
in
g
th
e
ta
rg
et

p
ay

ou
t
ra
tio

K
E
Y
P
O
IN
TS

•
T
h
e
ra
ti
o
is
ca
lc
u
la
te
d
by
d
iv
id
in
g
D
iv
id
en
d
s
P
ai
d
by
N
et

In
co
m
e
fo
r
th
e
sa
m
e
ac
co
u
n
ti
n
g
p
er
io
d
,o
r
D
iv
id
en
d
p
er

Sh
ar
e
by
E
ar
n
in
gs
p
er
Sh
ar
e.

•
A
h
ig
h
d
iv
id
en
d
ra
ti
o
ap
p
ea
ls
to
in
ve
st
or
s
w
h
o
w
an
t
h
ig
h

cu
rr
en
t
in
co
m
e
an
d
ar
e
u
n
co
n
ce
rn
ed
w
it
h
ca
p
it
al
ga
in
s.
A

lo
w
er
ra
ti
o
ap
p
ea
ls
to
in
ve
st
or
s
w
h
o
va
lu
e
gr
ow
th
an
d
ca
p
it
al

ga
in
s
ov
er
in
co
m
e.

•
In
ge
n
er
al
,t
h
e
D
iv
id
en
d
P
ay
ou
t
R
at
io
of
p
u
bl
ic
ly
tr
ad
ed

co
m
p
an
ie
s
h
as
st
ea
d
il
y
d
ec
li
n
ed
,o
n
av
er
ag
e,
si
n
ce
19
40
.

S
e
tt
in
g
th
e
T
a
rg
e
t
P
a
yo
u
t
R
a
ti
o

T
h
e
T
ar
ge
t
P
ay
ou
t
R
at
io
,o
r
D
iv
id
en
d
P
ay
ou
t
R
at
io
,i
s
th
e
fr
ac
ti
on

of
n
et
in
co
m
e
a
fi
rm
p
ay
s
to
it
s
st
oc
kh
ol
d
er
s
in
d
iv
id
en
d
s.
It
is

ca
lc
u
la
te
d
by
d
iv
id
in
g
th
e
d
iv
id
en
d
s
d
is
tr
ib
u
te
d
by
th
e
n
et
in
co
m
e

fo
r
th
e
sa
m
e
p
er
io
d
.T
h
e
p
ar
t
of
th
e
ea
rn
in
gs
n
ot
p
ai
d
to
in
ve
st
or
s

in
th
e
fo
rm
of
a
d
iv
id
en
d
is
le
ft
fo
r
in
ve
st
m
en
t
to
p
ro
vi
d
e
fo
r
fu
tu
re

ea
rn
in
gs
gr
ow
th
.I
n
ve
st
or
s
se
ek
in
g
h
ig
h
cu
rr
en
t
in
co
m
e
an
d
li
m
it
ed

ca
p
it
al
gr
ow
th
p
re
fe
r
co
m
p
an
ie
s
w
it
h
h
ig
h
D
iv
id
en
d
P
ay
ou
t
R
at
io
s.

H
ow
ev
er
in
ve
st
or
s
se
ek
in
g
ca
p
it
al
gr
ow
th
m
ay
p
re
fe
r
lo
w
er
p
ay
ou
t

ra
ti
os
.T
h
is
is
ap
p
ea
li
n
g
to
so
m
e
in
ve
st
or
s
be
ca
u
se
a
lo
w
er
d
iv
id
en
d

im
p
li
es
th
at
m
or
e
ea
rn
in
gs
ar
e
be
in
g
re
in
ve
st
ed
in
th
e
co
m
p
an
y,

w
h
ic
h
sh
ou
ld
ca
u
se
th
e
st
oc
k
p
ri
ce
to
ri
se
.S
om
e
in
ve
st
or
s,
su
ch
as

yo
u
n
g
p
eo
p
le
sa
vi
n
g
fo
r
re
ti
re
m
en
t,
m
ay
p
re
fe
r
h
ig
h
er
re
tu
rn
s
la
te
r

th
an
sm
al
le
r
ca
sh
d
is
tr
ib
u
ti
on
s
n
ow
.

81
3

Th
e
d
iv
id
en

d
am

ou
nt

a
co

m
p
an

y
w
ill
p
ay

ou
t
ge

ne
ra
lly

d
ep

en
d
s
on

its
op

er
at
io
ns

an
d
ex

p
an

si
on

p
ot
en

tia
l.
O
ld
er
,e

st
ab

lis
he

d
co

m
p
an

ie
s
te
nd

to
p
ay

hi
gh

er
d
iv
id
en

d
s

th
an

yo
un

ge
r,
gr
ow

in
g
co

m
p
an

ie
s.

Fi
g
ur
e
15

.1
0
D
iv
id
en
d

D
iv
id
e
n
d
R
a
ti
o
a
n
d
In
ve
st
m
e
n
t
S
tr
a
te
g
y

T
h
e
T
ar
ge
t
P
ay
ou
t
R
at
io
d
ep
en
d
s
on
w
h
at
in
ve
st
or
s
th
e

m
an
ag
em
en
t
of
a
co
m
p
an
y
ar
e
tr
yi
n
g
to
at
tr
ac
t,
an
d
w
h
at
cu
rr
en
t

in
ve
st
or
s’
ex
p
ec
ta
ti
on
s
ar
e.
It
al
so
d
ep
en
d
s
on
th
e
gr
ow
th
go
al
s
of

th
e
co
m
p
an
y.
If
a
co
m
p
an
y
is
tr
yi
n
g
to
gr
ow
ve
ry
fa
st
,i
t
m
ay
p
re
fe
r

to
re
in
ve
st
it
s
in
co
m
e
in
ex
p
an
d
in
g
op
er
at
io
n
s.

A
m
or
e
es
ta
bl
is
h
ed
fi
rm
w
it
h
an
es
ta
bl
is
h
ed
m
ar
ke
t
p
ro
ba
bl
y
d
oe
s

n
ot
n
ee
d
to
ex
p
an
d
it
s
op
er
at
io
n
s,
an
d
w
ou
ld
p
re
fe
r
to
u
se
it
s

ea
rn
in
g
to
co
m
p
en
sa
te
it
s
in
ve
st
or
s.
H
ig
h
gr
ow
th
fi
rm
s
in
ea
rl
y
li
fe

ge
n
er
al
ly
h
av
e
lo
w
or
ze
ro
p
ay
ou
t
ra
ti
os
.A
s
th
ey
m
at
u
re
,t
h
ey
te
n
d

to
re
tu
rn
m
or
e
of
th
e
ea
rn
in
gs
ba
ck
to
in
ve
st
or
s
(F
ig
u
re
15
.1
0
).

H
is
to
ri
ca
l
P
e
rs
p
e
ct
iv
e

T
h
e
p
ay
ou
t
ra
te
h
as
gr
ad
u
al
ly
d
ec
li
n
ed
fr
om
90
%
of
op
er
at
in
g

ea
rn
in
gs
in
th
e
19
40
s
to
ab
ou
t
30
%
in
re
ce
n
t
ye
ar
s.
F
or
sm
al
le
r

gr
ow
th
co
m
p
an
ie
s,
th
e
av
er
ag
e
p
ay
ou
t
ra
ti
o
ca
n
be
as
lo
w
as
10
%

So
u
rc
e:
ht
tp
s:
//
w
w
w
.b
ou
n
d
le
ss
.c
om
/f
in
a
n
ce
/d
iv
id
en
d
s/
se
tt
in
g
-t
he
–

d
iv
id
en
d
/s
et
ti
n
g
-t
he
-t
a
rg
et
-p
a
yo
u
t-
ra
ti
o/

C
C
-B
Y
-S
A

B
ou
n
d
le
ss
is
a
n
op
en
ly
li
ce
n
se
d
ed
u
ca
ti
on
a
lr
es
ou
rc
e

R
es

id
ua

lD
iv
id
en

d
M
od

el
Th

e
R
es

id
ua

lD
iv
id
en

d
M
od

el
r
st

us
es

ea
rn
in
gs

to
n

an
ce

ne
w

p
ro
je
ct
s,

th
en

d
is
tr
ib
ut
es

th
e
re
m
ai
nd

er
as

d
iv
id
en

d
s.

K
E
Y
P
O
IN
TS

•
T
h
e
R
es
id
u
al
D
iv
id
en
d
M
od
el
im
p
li
es
th
e
Ir
re
le
va
n
ce
of

D
iv
id
en
d
s
T
h
eo
ry
,w
h
ic
h
cl
ai
m
s
th
at
in
ve
st
or
s
ar
e
in
d
if
fe
re
n
t

be
tw
ee
n
re
tu
rn
s
in
th
e
fo
rm
of
d
iv
id
en
d
s
or
ca
p
it
al
ga
in
s.

•
R
es
id
u
al
D
iv
id
en
d
s
re
su
lt
in
a
p
as
si
ve
ly
-c
al
cu
la
te
d
d
iv
id
en
d
,

w
h
ic
h
ch
an
ge
s
ev
er
y
ye
ar
.

•
Si
n
ce
th
e
R
es
id
u
al
D
iv
id
en
d
M
od
el
as
su
m
es
d
iv
id
en
d
s
an
d

ca
p
it
al
ga
in
s
ar
e
tw
o
fo
rm
s
of
th
e
sa
m
e
va
lu
e,
it
w
il
ln
ot
af
fe
ct

th
e
m
ar
ke
t
va
lu
e.

D
e
fi
n
it
io
n

T
h
e
R
es
id
u
al
D
iv
id
en
d
M
od
el
is
a
m
et
h
od
a
co
m
p
an
y
u
se
s
to

d
et
er
m
in
e
th
e
d
iv
id
en
d
it
w
il
lp
ay
to
it
s
sh
ar
eh
ol
d
er
s.

C
om
p
an
ie
s
w
h
ic
h
u
se
re
ta
in
ed
ea
rn
in
gs
to
fi
n
an
ce
n
ew
p
ro
je
ct
s
u
se

th
is
m
et
h
od
.T
h
e
co
m
p
an
y
fi
rs
t
d
et
er
m
in
es
w
h
ic
h
n
ew
p
ro
je
ct
s
it

w
an
ts
to
fi
n
an
ce
,d
ed
ic
at
es
fu
n
d
s
to
th
os
e
p
ro
je
ct
s,
an
d
th
en

d
is
tr
ib
u
te
s
an
y
le
ft
ov
er
p
ro
fi
ts
to
it
s
sh
ar
eh
ol
d
er
s
as
d
iv
id
en
d
s.

81
4

T
h
is
m
od
el
ca
n
le
ad
to
u
n
p
re
d
ic
ta
bl
e
an
d
in
co
n
si
st
en
t
d
iv
id
en
d

re
tu
rn
s
fo
r
th
e
in
ve
st
or
.H
ow
ev
er
,t
h
e
co
m
p
an
y’
s
go
al
is
to
ge
n
er
at
e

fu
rt
h
er
p
ro
fi
ts
fr
om
th
e
p
ro
je
ct
s
it
fu
n
d
s,
w
h
ic
h
be
n
ef
it
s
th
e

sh
ar
eh
ol
d
er
s
ov
er
al
l.

Ir
re
le
va
n
ce
o
f
D
iv
id
e
n
d
s

T
h
e
R
es
id
u
al
D
iv
id
en
d
M
od
el
is
an
ou
tg
ro
w
th
of
T
h
e
M
od
ig
li
an
i

an
d
M
il
le
r
T
h
eo
ry
th
at
p
os
it
s
th
at
d
iv
id
en
d
s
ar
e
ir
re
le
va
n
t
to

in
ve
st
or
s.
T
h
is
sc
h
oo
lo
ft
h
ou
gh
t
be
li
ev
es
th
at
in
ve
st
or
s
d
o
n
ot
st
at
e

an
y
p
re
fe
re
n
ce
be
tw
ee
n
cu
rr
en
t
d
iv
id
en
d
s
an
d
ca
p
it
al
ga
in
s.
It
go
es

on
to
sa
y
th
at
d
iv
id
en
d
p
ol
ic
y
d
oe
s
n
ot
d
et
er
m
in
e
m
ar
ke
t
va
lu
e
of
a

st
oc
k.
A
cc
or
d
in
gl
y,
th
e
sh
ar
eh
ol
d
er
s
ar
e
in
d
if
fe
re
n
t
to
th
e
tw
o
w
ay
s

by
w
h
ic
h
th
ei
r
in
ve
st
m
en
t
gr
ow
s:

•
re
ce
iv
in
g
a
d
iv
id
en
d

•
sh
ar
e
p
ri
ce
in
cr
ea
si
n
g
d
u
e
to
re
ta
in
ed
ea
rn
in
gs

W
h
at
in
ve
st
or
s
w
an
t
ar
e
h
ig
h
re
tu
rn
s
–
ei
th
er
in
th
e
fo
rm
of

d
iv
id
en
d
s
or
in
th
e
fo
rm
of
re
-i
n
ve
st
m
en
t
of
re
ta
in
ed
ea
rn
in
gs
by

th
e
fi
rm
(F
ig
u
re
15
.1
1)
.

D
iv
id
e
n
d
o
r
C
a
p
it
a
l
G
a
in
T
ra
d
e
-O
ff

T
h
e
R
es
id
u
al
M
od
el
d
iv
id
en
d
p
ol
ic
y
is
a
p
as
si
ve
on
e
an
d
,i
n
th
eo
ry
,

d
oe
s
n
ot
in
fl
u
en
ce
m
ar
ke
t
p
ri
ce
be
ca
u
se
th
e
sa
m
e
w
ea
lt
h
is
cr
ea
te
d

fo
r
th
e
in
ve
st
or
re
ga
rd
le
ss
of
th
e
d
iv
id
en
d
.T
h
e
fi
rm
p
ay
in
g
ou
t

d
iv
id
en
d
s
is
ob
vi
ou
sl
y
ge
n
er
at
in
g
in
co
m
e
fo
r
an
in
ve
st
or
;h
ow
ev
er
,

ev
en
if
th
e
fi
rm
d
iv
er
ts
so
m
e
ea
rn
in
gs
fo
r
in
ve
st
m
en
t
op
p
or
tu
n
it
ie
s,

th
e
in
co
m
e
of
th
e
in
ve
st
or
s
w
il
lr
is
e
la
te
r,
as
su
m
in
g
th
at
th
os
e

in
ve
st
m
en
ts
ar
e
p
ro
fi
ta
bl
e.
T
h
e
d
iv
id
en
d
,t
h
er
ef
or
e,
fl
u
ct
u
at
es
ev
er
y

ye
ar
be
ca
u
se
of
d
if
fe
re
n
t
in
ve
st
m
en
t
op
p
or
tu
n
it
ie
s
an
d
ea
rn
in
g

le
ve
ls
.

So
u
rc
e:
ht
tp
s:
//
w
w
w
.b
ou
n
d
le
ss
.c
om
/f
in
a
n
ce
/d
iv
id
en
d
s/
se
tt
in
g
-t
he
–

d
iv
id
en
d
/r
es
id
u
a
l-
d
iv
id
en
d
-m
od
el
/

C
C
-B
Y
-S
A

B
ou
n
d
le
ss
is
a
n
op
en
ly
li
ce
n
se
d
ed
u
ca
ti
on
a
lr
es
ou
rc
e

81
5

C
om

p
an

ie
s
us

ua
lly

is
su

e
in
ve

st
or
s
a
ch

ec
k
fo
r
th
ei
r

d
iv
id
en

d
.

Fi
g
ur
e
15

.1
1
W
rit
in
g
a
ch
ec
k.

M
et
ho

d
of

P
ay

m
en

t
D
iv
id
en

d
s,

w
hi
ch

ar
e
d
is
tr
ib
ut
ed

b
as

ed
on

ho
w

m
an

y
sh

ar
es

ea
ch

p
er
so

n
ow

ns
,c

an
b
e
p
ai
d
us

in
g
ca

sh
,

st
oc

k,
or

ot
he

r
co

m
p
an

y
p
ro
p
er
ty
.

K
E
Y
P
O
IN
TS

•
T
h
e
m
os
t
co
m
m
on
m
et
h
od
of
p
ay
m
en
t
fo
r
d
iv
id
en
d
s
is
ca
sh
.

T
h
is
ca
n
be
ei
th
er
el
ec
tr
on
ic
tr
an
sf
er
or
ch
ec
k
to
th
e

sh
ar
eh
ol
d
er
,a
n
d
is
ta
xe
d
w
h
en
it
is
re
ce
iv
ed
.

•
T
h
e
d
iv
id
en
d
ca
n
al
so
be
p
ai
d
as
n
ew
sh
ar
es
of
st
oc
k.
T
h
is

ca
n
ei
th
er
in
vo
lv
e
n
ew
ly
is
su

ed
sh

ar
es
or
ol
d
sh
ar
es
.

•
T
h
e
m
os
t
ra
re
m
et
h
od
is
to
d
is
tr
ib
u
te
p
ro
p
er
ty
or
ot
h
er
as
se
ts

as
th
e
d
iv
id
en
d
.

P
ro
p
o
rt
io
n
a
l
P
a
ym
e
n
t

A
d
iv
id
en
d
is
al
lo
ca
te
d
as
a
fi
xe
d
am
ou
n
t
p
er
sh
ar
e.
T
h
er
ef
or
e,
a

sh
ar
eh
ol
d
er
re
ce
iv
es
a
d
iv
id
en
d
in
p
ro
p
or
ti
on
to
th
ei
r
sh
ar
eh
ol
d
in
g.

C
a
sh

C
as
h
d
iv
id
en
d
s
ar
e
th
os
e
p
ai
d
ou
t
in
cu
rr
en
cy
,u
su
al
ly
vi
a
el
ec
tr
on
ic

fu
n
d
s
tr
an
sf
er
or
a
p
ri
n
te
d
p
ap
er
ch
ec
k.
Su
ch
d
iv
id
en
d
s
ar
e
a
fo
rm

of
in
ve
st
m
en
t
in
co
m
e
an
d
ar
e
u
su
al
ly
ta
xa
bl
e
to
th
e
re
ci
p
ie
n
t
in
th
e

ye
ar
th
ey
ar
e
p
ai
d
.T
h
is
is
th
e
m
os
t
co
m
m
on
m
et
h
od
of
sh
ar
in
g

co
rp
or
at
e
p
ro
fi
ts
w
it
h
th
e

sh
ar
eh
ol
d
er
s
of
th
e
co
m
p
an
y.

F
or
ea
ch
sh
ar
e
ow
n
ed
,a

d
ec
la
re
d
am
ou
n
t
of
m
on
ey
is

d
is
tr
ib
u
te
d
.T
h
u
s,
if
a
p
er
so
n

ow
n
s
10
0
sh
ar
es
an
d
th
e
ca
sh

d
iv
id
en
d
is
50
ce
n
ts
p
er
sh
ar
e,

th
e
h
ol
d
er
of
th
e
st
oc
k
w
il
lb
e

p
ai
d
50
d
ol
la
rs
.D
iv
id
en
d
s
p
ai
d

ar
e
n
ot
cl
as
si
fi
ed
as
an
ex
p
en
se
,

bu
t
ra
th
er
a
d
ed
u
ct
io
n
of

re
ta
in
ed
ea
rn
in
gs
.D
iv
id
en
d
s

p
ai
d
d
oe
s
n
ot
sh
ow
u
p
on
a

In
co
m
e
St
at
em
en
t
bu
t
d
oe
s

ap
p
ea
r
on
th
e
B
al
an
ce
Sh
ee
t

(F
ig
u
re
15
.1
2)
.

S
to
ck

St
oc
k
or
sc
ri
p
d
iv
id
en
d
s
ar
e
th
os
e
p
ai
d
ou
t
in
th
e
fo
rm
of
ad
d
it
io
n
al

st
oc
k
sh
ar
es
of
th
e
is
su
in
g
co
rp
or
at
io
n
or
an
ot
h
er
co
rp
or
at
io
n
,s
u
ch

as
it
s
su
bs
id
ia
ry
co
rp
or
at
io
n
.T
h
ey
ar
e
u
su
al
ly
is
su
ed
in
p
ro
p
or
ti
on

to
sh
ar
es
ow
n
ed
.F
or
ex
am
p
le
,f
or
ev
er
y
10
0
sh
ar
es
of
st
oc
k
ow
n
ed
,

a
5%
st
oc
k
d
iv
id
en
d
w
il
ly
ie
ld
5
ex
tr
a
sh
ar
es
.I
ft
h
e
p
ay
m
en
t

in
vo
lv
es
th
e
is
su
e
of
n
ew
sh
ar
es
,i
t
is
si
m
il
ar
to
a
st
oc
k
sp
li
t:
it

81
6

C
as

h
is
on

e
of

se
ve

ra
lw

ay
s
th
at

a
co

m
p
an

y
ca

n
p
ay

d
iv
id
en

d
s.

Fi
g
ur
e
15

.1
2
D
iv
id
en
d

in
cr
ea
se
s
th
e
to
ta
ln
u
m
be
r
of
sh
ar
es
w
h
il
e
lo
w
er
in
g
th
e
p
ri
ce
of

ea
ch
sh
ar
e
w
it
h
ou
t
ch
an
gi
n
g
th
e
m
ar
ke
t
ca
p
it
al
iz
at
io
n
,o
r
to
ta
l

va
lu
e,
of
th
e
sh
ar
es
h
el
d
.

P
ro
p
e
rt
y

P
ro
p
er
ty
d
iv
id
en
d
s
or
d
iv
id
en
d
s
in
sp
ec
ie
(L
at
in
fo
r
“i
n
ki
n
d
“)
ar
e

th
os
e
p
ai
d
ou
t
in
th
e
fo
rm
of
as
se
ts
fr
om
th
e
is
su
in
g
co
rp
or
at
io
n
or

an
ot
h
er
co
rp
or
at
io
n
,s
u
ch
as
a
su
bs
id
ia
ry
co
rp
or
at
io
n
.T
h
ey
ar
e

re
la
ti
ve
ly
ra
re
an
d
m
os
t
fr
eq
u
en
tl
y
ar
e
se
cu
ri
ti
es
of
ot
h
er
co
m
p
an
ie
s

ow
n
ed
by
th
e
is
su
er
.H
ow
ev
er
,t
h
ey
ca
n
ta
ke
ot
h
er
fo
rm
s,
su
ch
as

p
ro
d
u
ct
s
an
d
se
rv
ic
es
.

In
te
ri
m
D
iv
id
e
n
d
s

In
te
ri
m
d
iv
id
en
d
s
ar
e
d
iv
id
en
d
p
ay
m
en
ts
m
ad
e
be
fo
re
a
co
m
p
an
y’
s

an
n
u
al
ge
n
er
al
m
ee
ti
n
g
an
d
fi
n
al
fi
n
an
ci
al
st
at
em
en
ts
.T
h
is

d
ec
la
re
d
d
iv
id
en
d
u
su
al
ly
ac
co
m
p
an
ie
s
th
e
co
m
p
an
y’
s
in
te
ri
m

fi
n
an
ci
al
st
at
em
en
ts
.

O
th
e
r

O
th
er
d
iv
id
en
d
s
ca
n
be
u
se
d
in
st
ru
ct
u
re
d
fi
n
an
ce
.F
in
an
ci
al
as
se
ts

w
it
h
a
kn
ow
n
m
ar
ke
t
va
lu
e
ca
n
be
d
is
tr
ib
u
te
d
as
d
iv
id
en
d
s;

w
ar
ra
n
ts
ar
e
so
m
et
im
es
d
is
tr
ib
u
te
d
in
th
is
w
ay
.F
or
la
rg
e

co
m
p
an
ie
s
w
it
h
su
bs
id
ia
ri
es
,d
iv
id
en
d
s
ca
n
ta
ke
th
e
fo
rm
of
sh
ar
es

in
a
su
bs
id
ia
ry
co
m
p
an
y.
A
co
m
m
on
te
ch
n
iq
u
e
fo
r
“s
p
in
n
in
g
of
f”
a

co
m
p
an
y
fr
om
it
s
p
ar
en
t
is
to
d
is
tr
ib
u
te
sh
ar
es
in
th
e
n
ew
co
m
p
an
y

to
th
e
ol
d
co
m
p
an
y’
s
sh
ar
eh
ol
d
er
s.
T
h
e
n
ew
sh
ar
es
ca
n
th
en
be

tr
ad
ed
in
d
ep
en
d
en
tl
y.

So
u
rc
e:
ht
tp
s:
//
w
w
w
.b
ou
n
d
le
ss
.c
om
/f
in
a
n
ce
/d
iv
id
en
d
s/
se
tt
in
g
-t
he
–

d
iv
id
en
d
/m
et
ho
d
-o
f-
p
a
ym
en
t/

C
C
-B
Y
-S
A

B
ou
n
d
le
ss
is
a
n
op
en
ly
li
ce
n
se
d
ed
u
ca
ti
on
a
lr
es
ou
rc
e

81
7

S
to
ck

S
p
lit
s

S
to
ck

D
iv
id
en

d
s

R
ev

er
se

S
p
lit
s

S
ha

re
R
ep

ur
ch

as
es

B
en

e
ts

of
S
ha

re
R
ep

ur
ch

as
es

D
ra
w
b
ac

ks
of

S
ha

re
R
ep

ur
ch

as
es

D
iv
id
en

d
R
ei
nv

es
tm

en
ts

Se
ct
io
n
4

C
as

h
D
iv
id
en

d
A
lte

rn
at
iv
es

81
8

ht
tp
s:
//
w
w
w
.b
ou

nd
le
ss
.c
om

/
na

nc
e/
d
iv
id
en

d
s/
ca

sh
-d
iv
id
en

d
-a
lte

rn
at
iv
es

—
2/

S
to
ck

S
p
lit
s

A
st
oc

k
sp

lit
in
cr
ea

se
s
th
e
nu

m
b
er

of
sh

ar
es

ou
ts
ta
nd

in
g
w
ith

ou
t
ch

an
gi
ng

th
e
m
ar
ke

t
va

lu
e
of

th
e

r
m
.

K
E
Y
P
O
IN
TS

•
A
st
oc
k
sp
li
t
is

ex
ec

u
te
d
by
of
fe
ri
n
g
se
ve
ra
ln
ew
sh
ar
es
in

ex
ch
an
ge
fo
r
ol
d
on
es
.T
h
is
m
ay
be
a
3-
fo
r-
1
sp
li
t,
fo
r

ex
am
p
le
:e
ac
h
sh
ar
e
co
u
ld
be
tr
ad
ed
in
fo
r
th
re
e
n
ew

on
es
.

•
A
st
oc
k
sp
li
t
d
oe
s
n
ot
ch
an
ge
th
e
m
ar
ke
t
ca
p
it
al
iz
at
io
n
of
th
e

fi
rm
,i
t
m
er
el
y
ch
an
ge
s
th
e
n
u
m
be
r
of
sh
ar
es

ou
ts
ta
n
d
in
g.

T
h
er
ef
or
e
th
e
p
ri
ce
p
er
sh
ar
e
d
ec
re
as
es
as
th
e
n
u
m
be
r
of

sh
ar
es
ou
ts
ta
n
d
in
g

in
cr
ea
se
s.

•
E
ac
h
sh
ar
eh
ol
d
er
re
ta
in
s
h
is
or
h
er
sa
m
e
ow
n
er
sh
ip
st
ak
e

be
ca
u
se
th
e
n
u
m
be
r
of
sh
ar
e
s/
h
e
h
ol
d
s
ch
an
ge
s
in

p
ro
p
or
ti
on
to
th
e
ch
an
ge
in
th
e
to
ta
ln
u
m
be
r
of
sh
ar
es

ou
ts
ta
n
d
in
g.

A
st
oc
k
sp
li
t
or
st
oc
k
d
iv
id
e
in
cr
ea
se
s
th
e
n
u
m
be
r
of
sh
ar
es
in
a

p
u
bl
ic
co
m
p
an
y.
Su
p
p
os
e
a
co
m
p
an
y
h
as
1,
0
0
0
sh
ar
es
ou
ts
ta
n
d
in
g.

T
h
e
co
m
p
an
y
m
ay
w
an
t
to
in
cr
ea
se
th
is
n
u
m
be
r
to
2,
0
0
0
sh
ar
es

w
it
h
ou
t
is
su
in
g
n
ew
sh
ar
es
.T
h
ey
w
ou
l

d
sp

li
t
th
ei
r
st
oc
k
2-
fo
r-
1.

T
h
at
m
ea
n
s
th
at
ev
er
y
sh
ar
eh
ol
d
er
tr
ad
es
in
on
e
ol
d
sh
ar
e
an
d
ge
ts

tw
o
n
ew
sh
ar
es
in
re
tu
rn
.

T
h
e
ow
n
er
sh
ip
st
ak
e
fo
r
ea
ch
sh
ar
eh
ol
d
er
re
m
ai
n
s
co
n
st
an
t
be
ca
u
se

th
e
n
u
m
be
r
of
sh
ar
es
h
el
d
ch
an
ge
s
in
p
ro
p
or
ti
on
to
th
e
n
u
m
be
r
of

sh
ar
es
ou
ts
ta
n
d
in
g.
T
h
ey
ow
n
th
e
sa
m
e
p
er
ce
n
ta
ge
of
th
e

ou
ts
ta
n
d
in
g
sh
ar
es
,t
h
ou
gh
th
e
n
om
in
al
n
u
m
be
r
of
sh
ar
es

in
cr
ea
se
s.

T
h
e
p
ri
ce
of
th
e
sh
ar
es
,h
ow
ev
er
,c
h
an
ge
s.
Si
n
ce
th
e
m
ar
ke
t
va
lu
e
of

th
e
co
m
p
an
y
re
m
ai
n
s
th
e
sa
m
e,
th
e
p
ri
ce
of
th
e
n
ew
sh
ar
es
ad
ju
st
s

to
re
fl
ec
t
th
e
n
ew
n
u
m
be
r
of
ou
ts
ta
n
d
in
g
sh
ar
es
.F
or
ex
am
p
le
,a

co
m
p
an
y
th
at
h
as
10
0
,0
0
0
sh
ar
es
ou
ts
ta
n
d
in
g
th
at
tr
ad
e
at
$
6
h
as
a

m
ar
ke
t
ca
p
it
al
iz
at
io
n
of
$
60
0
,0
0
0
.A
ft
er
a
3-
fo
r-
1
st
oc
k
sp
li
t
th
e

m
ar
ke
t
ca
p
it
al
iz
at
io
n
of
th
e
co
m
p
an
y
re
m
ai
n
s
u
n
ch
an
ge
d
at

$
60
0
,0
0
0
,b
u
t
th
er
e
ar
e
n
ot
30
0
,0
0
0
sh
ar
es
tr
ad
in
g
at
$
2.

L
ow
er
in
g
th
e
p
ri
ce
p
er
sh
ar
e

is
at
tr
ac
ti

ve
to

so
m
e

co
m
p
an
ie
s.

B
er
ks

h
ir
e

H
at
h
aw
ay

C
la
ss

A
sh

ar
es
h
av
e

n
ev
er
be
en
sp
li
t,
so
th
e
p
ri
ce

h
as
fo
ll
ow
ed
th
e
co
m
p
an
y’
s

gr
ow
th
ov
er
ti
m
e
(F
ig
u
re
15
.

13
).
Si
n
ce
th
e
p
ri
ce
of
a
C
la
ss
A
sh
ar
e
w
as
ov
er
$
12
1,
0
0
0
on
M
ay
2,

20
12
,s
m
al
le
r
in
ve
st
or
s
m
ay
h
av
e
ch
os
en
n
ot
to
in
ve
st
in
B
er
ks
h
ir
e

H
at
h
aw
ay
C
la
ss
A
sh
ar
es
be
ca
u
se
of
ca
sh
-f
lo
w
or
li
qu
id
it
y
co
n
ce
rn
s.

T
h
er
e
ar
e,
h
ow
ev
er
,C
la
ss
B
sh
ar
es
th
at
tr
ad
e
at
a
lo
w
er
va
lu
e.

81
9

B
er
ks

hi
re

H
at
ha

w
ay

ha
s
fa
m
ou

sl
y
ne

ve
r

ha
d
a
st
oc

k
sp

lit
,a

nd
ha

s
ne

ve
r
p
ai
d
a

d
iv
id
en

d
.A

s
a
re
su

lt
its

C
la
ss

A
sh

ar
es

tr
ad

ed
at

$1
21

,7
75

.0
0
as

of
M
ay

2,
20

12
,

m
ak

in
g
th
em

th
e
hi
gh

es
t-
p
ric

ed
sh

ar
es

on
th
e
N
ew

Yo
rk

S
to
ck

E
xc

ha
ng

Fi
g
ur
e
15

.1
3
B
er
ks
hi
re
H
at
ha
w
ay

So
u
rc
e:
ht
tp
s:
//
w
w
w
.b
ou
n
d
le
ss
.c
om
/f
in
a
n
ce
/d
iv
id
en
d
s/
ca
sh
–

d
iv
id
en
d
-a
lt
er
n
a
ti
ve
s-
-2
/s
to
ck
-s
p
li
ts
—
2/

C
C
-B
Y
-S
A

B
ou
n
d
le
ss
is
a
n
op
en
ly
li
ce
n
se
d
ed
u
ca
ti
on
a
lr
es
ou
rc
e

S
to
ck

D
iv
id
en

d
s

S
to
ck

d
iv
id
en

d
s
ar
e
w
he

n
a
co

m
p
an

y
gi
ve

s
ea

ch
sh

ar
eh

ol
d
er

ad
d
iti
on

al
st
oc

k
in

lie
u
of

a
ca

sh
d
iv
id
en

d
.

K
E
Y
P
O
IN
TS

•
St
oc
k
d
iv
id
en
d
s
ar
e
n
o
d
if
fe
re
n
t
th
an
st
oc
k
sp
li
ts
in
p
ra
ct
ic
e.

T
h
ey
si
m
p
ly
in
cr
ea
se
th
e
n
u
m
be
r
of
sh
ar
es
ou
ts
ta
n
d

in
g,

bu
t

n
ot
th
e
m
ar
ke
t
ca
p
it
al
iz
at
io
n
or
th
e
to
ta
lv
al
u
e
of
th
e

sh
ar
eh
ol
d
er
s’
as
se
ts
.

•
St
oc
k
d
iv
id
en
d
s
m
ay
be
p
ai
d
fr
om
n
on
-o
u
ts
ta
n
d
in
g
st
oc
k
or

fr
om
th
e
st
oc
k
of
an
ot
h
er
co
m
p
an
y
(e
.g
.i
ts
su
bs
id
ia
ry
).

•
C
as
h
d
iv
id
en
d
s
ar
e
ta
xe
d
w
h
il
e
st
oc
k
d
iv
id
en
d
s
ar
e
n
ot
.

In
li
eu
of
ca
sh
,a
co
m
p
an
y
m
ay
ch
oo
se
to
p
ay
it
s
d
iv
id
en
d
in
th
e

fo
rm
of
st
oc
k.
In
st
ea
d
of
ea
ch
sh
ar
eh
ol
d
er
re
ce
iv
in
g,
sa
y
$
2
fo
r
ea
ch

sh
ar
e,
th
ey
m
ay
re
ce
iv
e

an
ad

d
it
io
n
al
sh
ar
e.
A
st
oc
k
d
iv
id
en
d
(a
ls
o

kn
ow
n
as
a
sc
ri
p
d
iv
id
en
d
)
ca
n
be
th
e
ec
on
om
ic
eq
u
iv
al
en
t
of
a

st
oc
k
sp
li
t.

W
h
en
a
st
oc
k
d
iv
id
en
d
is
p
ai
d
,n
o
sh
ar
eh
ol
d
er
ac
tu
al
ly
in
cr
ea
se
s
th
e

va
lu
es
of
h
is
or
h
er
as
se
ts
.T
h
e
to
ta
ln
u
m
be
r
of
sh
ar
es
ou
ts
ta
n
d
in
g

in
cr
ea
se
s
in
p
ro
p
or
ti
on
to
th
e
ch
an
ge
in
th
e
n
u
m
be
r
of
sh
ar
es
h
el
d

by
ea
ch
sh
ar
eh
ol
d
er
.I
fa
5%
st
oc
k
d
iv
id
en
d
is
p
ai
d
,t
h
e
to
ta
l

n
u
m
be
r
of
sh
ar
es
ou
ts
ta
n
d
in
g
in
cr
ea
se
s
by
5%
,a
n
d
ea
ch

82
0

sh
ar
eh
ol
d
er
w
il
lr
ec
ei
ve
5
ad
d
it
io
n
al
sh
ar
es
fo
r
ea
ch
10
0
h
el
d
.A
s
a

re
su
lt
,e
ac
h
sh
ar
eh
ol
d
er
h
as
th
e
sa
m
e
ow
n
er
sh
ip
st
ak
e
as
be
fo
re
th
e

st
oc
k
d
iv
id
en
d
.

In
ad
d
it
io
n
,t
h
e
va
lu
e
of
th
e
sh
ar
es
h
el
d
d
oe
s
n
ot
ch
an
ge
fo
r
ea
ch

sh
ar
eh
ol
d
er
.A
s
th
e
n
u
m
be
r
of
sh
ar
es
ou
ts
ta
n
d
in
g
in
cr
ea
se
s,
th
e

p
ri
ce
p
er
sh
ar
e
d
ro
p
s
be
ca
u
se
th
e
m
ar
ke
t
ca
p
it
al
iz
at
io
n
d
oe
s
n
ot

ch
an
ge
.T
h
er
ef
or
e,
ea
ch
sh
ar
eh
ol
d
er
w
il
lh
ol
d
m
or
e
sh
ar
es
,b
u
t
ea
ch

h
as
a
lo
w
er
p
ri
ce
so
th
e
to
ta
lv
al
u
e
of
th
e
sh
ar
es
re
m
ai
n
s

u
n
ch
an
ge
d
.

T
h
e
st
oc
k
d
iv
id
en
d
is
n
ot
,h
ow
ev
er
,e
xa
ct
ly
th
e
sa
m
e
as
a
st
oc
k
sp
li
t.

A
st
oc
k
sp
li
t
is
p
ai
d
by
sw
it
ch
in
g
ou
t
ol
d
sh
ar
es
fo
r
a
gr
ea
te
r

n
u
m
be
r
of
n
ew
sh
ar
es
.T
h
e
co
m
p
an
y
is
es
se
n
ti
al
ly
co
n
ve
rt
in
g
to
a

n
ew
se
t
of
sh
ar
es
an
d
as
ki
n
g
ea
ch
sh
ar
eh
ol
d
er
to
tr
ad
e
in
th
e
ol
d

on
es
.

A
st
oc
k
d
iv
id
en
d
co
u
ld
be
p
ai
d
fr
om
sh
ar
es
n
ot
-o
u
ts
ta
n
d
in
g.
T
h
es
e

ar
e
th
e
co
m
p
an
y’
s
ow
n
sh
ar
es
th
at
it
h
ol
d
s:
th
ey
ar
e
n
ot
ci
rc
u
la
ti
n
g

in
th
e
m
ar
ke
t,
bu
t
w
er
e
is
su
ed
ju
s

t
th
e
sa

m
e.
T
h
e
co
m
p
an
y
m
ay

h
av
e
go
tt
en
th
es
e
sh
ar
es
fr
om
sh
ar
e
re
p
u
rc
h
as
es
,o
r
si
m
p
ly
fr
om

th
em
n
ot
be
in
g
so
ld
w
h
en
is
su
ed
.

St
oc
k
d
iv
id
en
d
s
m
ay
al
so
be
p
ai
d
fr
om
n
on
-o
u
ts
ta
n
d
in
g
st
o
ck
or

fr
om
th
e
st
oc
k
of
an
ot
h
er
co
m
p
an
y
(e
.g
.i
ts
su
bs
id
ia
ry
).

A
n
ad
va
n
ta
ge
of
p
ay
in
g
st
oc
k

d
iv
id
en
d
s
in
st
ea
d
of
ca
sh

d
iv
id
en
d
s
to
th
e
sh
ar
eh
ol
d
er
is

d
u
e
to
ta
x
co
n
si
d
er
at
io
n
s.

C
as
h
d
iv
id
en
d
s
ar
e
ta
xe
d
,

w
h
il
e
st
oc
k
d
iv
id
en
d
s
ar
e
n
ot

(F
ig
u
re
15
.1
4)
.O
fc
ou
rs
e,

st
oc
k
d
iv
id
en
d
s
d
on
‘t
ac
tu
al
ly

ch
an
ge
th
e
as
se
t
va
lu
e
of
th
e

sh
ar
eh
ol
d
er
s
so
,i
n
ef
fe
ct
,

n
ot
h
in
g
of
su
bs
ta
n
ce
h
as

oc
cu
rr
ed
.

So
u
rc
e:
ht
tp
s:
//
w
w
w
.b
ou
n
d
le
ss
.c
om
/f
in
a
n
ce
/d
iv
id
en
d
s/
ca
sh
–

d
iv
id
en
d
-a
lt
er
n
a
ti
ve
s-
-2
/s
to
ck
-d
iv
id
en
d
s-
-2
/

C
C
-B
Y
-S
A

B
ou
n
d
le
ss
is
a
n
op
en
ly
li
ce
n
se
d
ed
u
ca
ti
on
a
lr
es
ou
rc
e

82
1

Th
e
E
is
ne

r
vs
.M

ac
om

b
er

ca
se

w
as

a
U
S

S
up

re
m
e
C
ou

rt
C
as

e
th
at

he
lp
ed

d
et
er
m
in
e
th
e
d
i
er
en

ce
s
in

ta
xa

tio
n
of

ca
sh

an
d
st
oc

k
d
iv
id
en

d
s.

Fi
g
ur
e
15

.1
4
S
up
re
m
e
C
ou
rt
S
ea
l

R
ev

er
se

S
p
lit
s

R
ev

er
se

sp
lit
s
ar
e
w
he

n
a
co

m
p
an

re
d
uc

es
th
e

nu
m
b
er

of
sh

ar
es

ou
ts
ta
nd

in
g
b
y
o

er
in
g
a
nu

m
b
er

of
ne

w
sh

ar
es

fo
r
ea

ch
ol
d
on

K
E
Y
P
O
IN
TS

•
In
a
re
ve
rs
e
st
oc
k
sp
li
t
(a
ls
o
ca
ll
ed
a
st
oc
k
m
er
ge
),
th
e

co
m
p
an
y
is
su
es
a
sm
al
le
r
n
u
m
be
r
of
n
ew
sh
ar
es
.N
ew
sh
ar
es

ar
e
ty
p
ic
al
ly
is
su
ed
in
a
si
m
p
le
ra
ti
o,
e.
g.
1
n
ew
sh
ar
e
fo
r
2
ol
d

sh
ar
es
,3
fo
r
4,
et
c.

•
A
re
ve
rs
e
sp
li
t
bo
os
ts
th
e
sh
ar
e
p
ri
ce
,s
o
th
er
e
is
a
st
ig
m
a

at
ta
ch
ed
.S
om
e
in
ve
st
or
s
h
av
e
ru
le
s
ag
ai
n
st
tr
ad
in
g
sh
ar
es

be
lo
w
a
ce
rt
ai
n
va
lu
e,
so
a
co
m
p
an
y
in
fi
n
an
ci
al
tr
ou
bl
e
m
ay

is
su
e
a
re
ve
rs
e
sp
li
t
to
ke
ep
th
ei
r
sh
ar
e
p
ri
ce
ab
ov
e
th
at

th
re
sh
ol
d
.

•

A
re
ve
rs
e
st
oc
k
sp
li
t
m
ay
be
u
se
d
to

re
d
u
ce
th
e
n
u
m
be
r
of

sh
ar
eh
ol
d
er
s.
If
a

co
m
p
an
y
co
m
p
le
te
s
re
ve
rs
e
sp
li
t
in

w
h
ic
h
1

n
ew
sh
ar
e
is
is
su
ed
fo
r
ev
er
y
10
0
ol
d
sh
ar
es
,a
n
y
in
ve
st
or

h
ol
d
in
g
le
ss
th
an
10
0
sh
ar
es
w
ou
ld
si
m
p
ly
re
ce
iv
e
a
ca
sh

p
ay
m
en
t.

B
y
ow
n
in
g
a
sh
ar
e,
th
e
sh
ar
eh
ol
d
er
ow
n
s
a
p
er
ce
n
ta
ge
of
th
e

co
m
p
an
y
w
h
os
e
sh
ar
e
s/
h
e
ow
n
s.
A
sh
ar
e,
h
ow
ev
er
,d
oe
s
en
ti
tl
e
th
e

sh
ar
eh
ol
d
er
to
a
sp
ec
if
ic
p
er
ce
n
ta
ge
ow
n
er
sh
ip
;t
h
e
am
ou
n
t
of
th
e

co
m
p
an
y
th
at
th
e
sh
ar
eh
ol
d
er
ow
n
s
is
d
ep
en
d
en
t
of
th
e
n
u
m
be
r
of

sh
ar
es
ow
n
ed
an
d
th
e
n
u
m
be
r
of
sh
ar
es
ou
ts
ta
n
d
in
g.
If
Ji
m
ow
n
s
10

sh
ar
es
of
O
ra
cl
e,
an
d
th
er
e
ar
e
1,
0
0
0
sh
ar
es
ou
ts
ta
n
d
in
g,
Ji
m

ef
fe
ct
iv
el
y
ow
n
s
1%
of
O
ra
cl
e.
If
th
e
n
u
m
be
r
of
sh
ar
es
ou
ts
ta
n
d
in
g

w
er
e
to
d
ou
bl
e
to
2,
0
0
0
,J
im
‘s
10
sh
ar
es
w
ou
ld
n
ow
co
rr
es
p
on
d
to
a

0
.5
%
ow
n
er
sh
ip
st
ak
e.
In
or
d
er
fo
r
Ji
m
‘s
ow
n
er
sh
ip
st
ak
e
to
re
m
ai
n

co
n
st
an
t,
th
e
n
u
m
be
r
of
sh
ar
es
h
e
h
ol
d
s
m
u
st
ch
an
ge
in
p
ro
p
or
ti
on

to
ch
an
ge
in
ou
ts
ta
n
d
in
g
sh
ar
es
:h
e
m
u
st
ow
n
20
sh
ar
es
if
th
er
e
ar
e

2,
0
0
0
sh
ar
es
ou
ts
ta
n
d
in
g.

T
h
at
is
th
e
p
re
m
is
e
be
h
in
d
a
re
ve
rs
e
st
oc
k
sp
li
t.
In
a
re
ve
rs
e
st
oc
k

sp
li
t
(a
ls
o
ca
ll
ed
a
st
oc
k
m
er
ge
),
th
e
co
m
p
an
y
is
su
es
a
sm
al
le
r

n
u
m
be
r
of
n
ew
sh
ar
es
.N
ew
sh
ar
es
ar
e
ty
p
ic
al
ly
is
su
ed
in
a
si
m
p
le

ra
ti
o,
e.
g.
1
n
ew
sh
ar
e
fo
r
2
ol
d
sh
ar
es
,3
fo
r
4,
et
c.

T
h
e
re
d
u
ct
io
n
in
th
e
n
u
m
be
r
of
is
su
ed
sh
ar
es
is
ac
co
m
p
an
ie
d
by
a

p
ro
p
or
ti
on
al
in
cr
ea
se
in
th
e
sh
ar
e
p
ri
ce
.A
co
m
p
an
y
w
it
h
a
m
ar
ke
t

ca
p
it
al
iz
at
io
n
of
$
1,
0
0
0
,0
0
0
fr
om
1,
0
0
0
,0
0
0
sh
ar
es
tr
ad
in
g
at
$
1

ch
oo
se
s
to
re
d
u
ce
th
e
n
u
m
be
r
of
ou
ts
ta
n
d
in
g
sh
ar
es
to
50
0
,0
0
0

th
ro
u
gh
a
re
ve
rs
e
sp
li
t.
T
h
is
le
ad
s
to
a
co
rr
es
p
on
d
in
g
ri
se
in
th
e

st
oc
k
p
ri
ce
to
$
2.

T
h
er
e
is
a
st
ig
m
a
at
ta
ch
ed
to
d
oi
n
g
a
re
ve
rs
e
st
oc
k
sp
li
t,
so
it
is
n
ot

in
it
ia
te
d
w
it
h
ou
t
ve
ry
go
od
re
as
on
an
d
m
ay
ta
ke
a
sh
ar
eh
ol
d
er
or

bo
ar
d
m
ee
ti
n
g
fo
r
co
n
se
n
t.
M
an
y
in
st
it
u
ti
on
al
in
ve
st
or
s
an
d
m
u
tu
al

fu
n
d
s,
fo
r
ex
am
p
le
,h
av
e
ru
le
s
ag
ai
n
st
p
u
rc
h
as
in
g
a
st
oc
k
w
h
os
e

p
ri
ce
is
be
lo
w
so
m
e
m
in
im
u
m
.I
n
an
ex
tr
em
e
ca
se
,a
co
m
p
an
y

82
2

w
h
os
e
sh
ar
e
p
ri
ce
h
as
d
ro
p
p
ed
so
lo
w

th
at
it
is
in
d
an
ge
r
of
be
in
g
d
el
is
te
d

fr
om
it
s
st
oc
k
ex
ch
an
ge
,m
ig
h
t
u
se
a

re
ve
rs
e
st
oc
k
sp
li
t
to
in
cr
ea
se
it
s
sh
ar
e

p
ri
ce
.F
or
th
es
e
re
as
on
s,
a
re
ve
rs
e
st
oc
k

sp
li
t
is
of
te
n
an
in
d
ic
at
io
n
th
at
a

co
m
p
an
y
is
in
fi
n
an
ci
al
tr
ou
bl
e.

A
re
ve
rs
e
st
oc
k
sp
li
t
m
ay
be
u
se
d
to

re
d
u
ce
th
e
n
u
m
be
r
of
sh
ar
eh
ol
d
er
s.
If
a

co
m
p
an
y
co
m
p
le
te
s
re
ve
rs
e
sp
li
t
in

w
h
ic
h
1
n
ew
sh
ar
e
is
is
su
ed
fo
r
ev
er
y

10
0
ol
d
sh
ar
es
,a
n
y
in
ve
st
or
h
ol
d
in
g
le
ss
th
an
10
0
sh
ar
es
w
ou
ld

si
m
p
ly
re
ce
iv
e
a
ca
sh
p
ay
m
en
t.
If
th
e
n
u
m
be
r
of
sh
ar
eh
ol
d
er
s

d
ro
p
s,
th
e
co
m
p
an
y
m
ay
be
p
la
ce
d
in
to
a
d
if
fe
re
n

t
re
gu

la
to
ry

ca
te
go
ri
es
an
d
m
ay
be
go
ve
rn
ed
by
d
if
fe
re
n
t
la
w
s
(F
ig
u
re
15
.1
5)
.

So
u
rc
e:
ht
tp
s:
//
w
w
w
.b
ou
n
d
le
ss
.c
om
/f
in
a
n
ce
/d
iv
id
en
d
s/
ca
sh
–

d
iv
id
en
d
-a
lt
er
n
a
ti
ve
s-
-2
/r
ev
er
se
-s
p
li
ts
—
2/

C
C
-B
Y
-S
A

B
ou
n
d
le
ss
is
a
n
op
en
ly
li
ce
n
se
d
ed
u
ca
ti
on
a
lr
es
ou
rc
e

S
ha

re
R
ep

ur
ch

as
es

A
sh

ar
e

re
p
ur
ch

as
e
is

w
he

n
a
co

m
p
an

y
b
uy

s
its

ow
n

st
oc

k
fr
om

p
ub

lic
sh

ar
eh

ol
d
er
s,

th
us

re
d
uc

in
g
th
e

nu
m
b
er

of
sh

ar
es

ou
ts
ta
nd

in
g.

K
E
Y
P
O
IN
TS

•
Si
n
ce
th
e
m
ar
ke
t
ca
p
it
al
iz
at
io
n
is
u
n
ch
an
ge
d
an
d
th
e
n
u
m
be
r

of
sh
ar
es
ou
ts
ta
n
d
in
g
d
ro
p
s,
a
sh
ar
e
re
p
u
rc
h
as
e
w
il
ll
ea
d
to
a

co
rr
es
p
on
d
in
g
in
cr
ea
se
in
st
oc
k
p
ri
ce
.

•
T
h
e
re
d
u
ct
io
n
of
th
e
sh
ar
es
ou
ts
ta
n
d
in
g
m
ea
n
s
th
at
ev
en
if

p
ro
fi
ts
re
m
ai
n
th
e
sa
m
e,
th
e
ea
rn
in
gs
p
er
sh
ar
e
in
cr
ea
se
.

•
T
h
er
e
ar
e
a
n
u
m
be
r
of
m
et
h
od
s
fo
r
re
p
u
rc
h
as
in
g
sh
ar
es
,t
h
e

m
os
t
p
op
u
la
r
of
w
h
ic
h
is
op
en
-m
ar
ke
t:
th
e
co
m
p
an
y
bu
ys

ba
ck
sh
ar
es
at
th
e
m
ar
ke
t
d
ic
ta
te
d
p
ri
ce
if
th
e
p
ri
ce
is

fa
vo
ra
bl
e.

A
n
al
te
rn
at
iv
e
to
ca
sh
d
iv
id
en
d
s
is
sh
ar
e
re
p
u
rc
h
as
es
.I
n
a
sh
ar
e

re
p
u
rc
h
as
e,
th
e
is
su
in
g
co
m
p
an
y
p
u
rc
h
as
es
it
s
ow
n
p
u
bl
ic
ly
tr
ad
ed

sh
ar
es
,t
h
u
s
re
d
u
ci
n
g
th
e
n
u
m
be
r
of
sh
ar
es
ou
ts
ta
n
d
in
g.
T
h
e

co
m
p
an
y
th
en
ca
n
ei
th
er
re
ti
re
th
e
sh
ar
es
,o
r
h
ol
d
th
em
as
tr
ea
su
ry

st
oc
k
(n
on
-c
ir
cu
la
ti
n
g,
bu
t
av
ai
la
bl
e
fo
r
re
-i
ss
u
an
ce
).

W
h
en
a
co
m
p
an
y
re
p
u
rc
h
as
es
it
s
ow
n
sh
ar
es
,i
t
re
d
u
ce
s
th
e
n
u
m
be
r

of
sh
ar
es
h
el
d
by
th
e
p
u
bl
ic
.T
h
e
re
d
u
ct
io
n
of
th
e
sh
ar
es

82
3

Th
e
S
ec

ur
iti
es

an
d
E
xc

ha
ng

e
C
om

m
is
si
on

is
th
e

d
ep

ar
tm

en
t
th
at

se
ts

th
e

d
i
er
en

t
re
gu

la
tio

ns
re
ga

rd
in
g
st
oc

k
tr
ad

in
g
an

d
sp

lit
tin

Fi
g
ur
e
15

.1
5
S
E
C

ou
ts
ta
n
d
in
g
m
ea
n
s
th
at
ev
en
if
p
ro
fi
ts
re
m
ai
n
th
e
sa
m
e,
th
e

ea
rn
in
gs
p
er
sh
ar
e
in
cr
ea
se
.R
ep
u
rc
h
as
in
g
sh
ar
es
w
h
en
a
co
m
p
an
y’
s

sh
ar
e
p
ri
ce
is
u
n
d
er
va
lu
ed
be
n
ef
it
s
n
on
-s
el
li
n
g
sh
ar
eh
ol
d
er
s
an
d

ex
tr
ac
ts
va
lu
e
fr
om
sh
ar
eh
ol
d
er
s
w
h
o
se
ll
.

R
ep
u
rc
h
as
in
g
sh
ar
es
w
il
ll
ea
d
to
a
co
rr
es
p
on
d
in
g
in
cr
ea
se
in
p
ri
ce

of
th
e
sh
ar
es
st
il
lo
u
ts
ta
n
d
in
g.
T
h
e
m
ar
ke
t
ca
p
it
al
iz
at
io
n
of
th
e

co
m
p
an
y
is
u
n
ch
an
ge
d
,m
ea
n
in
g
th
at
a
re
d
u
ct
io
n
in
th
e
n
u
m
be
r
of

sh
ar
es
ou
ts
ta
n
d
in
g
m
u
st
be
ac
co
m
p
an
ie
d
by
an
in
cr
ea
se
in
st
oc
k

p
ri
ce
.

T
h
er
e
ar
e
si
x
p
ri
m
ar
y
re
p
u
rc
h
as
in
g
m
et
h
od
s:

1.
O
p
en
M
ar
ke
t:
T
h
e
fi
rm
bu
ys
it
s
st
oc
k
on
th
e
op
en
m
ar
ke
t

fr
om
sh
ar
eh
ol
d
er
s
w
h
en
th
e
p
ri
ce
is
fa
vo
ra
bl
e.
T
h
is
m
et
h
od

is
u
se
d
fo
r
al
m
os
t
75
%
of
al
lr
ep
u
rc
h
as
es
.

2.
Se
le
ct
iv
e
B
u
y-
B
ac
ks
:T
h
e
fi
rm
m
ak
es
re
p
u
rc
h
as
e
of
fe
rs

p
ri
va
te
ly
to
so
m
e
sh
ar
eh
ol
d
er
s.

3.
R
ep
u
rc
h
as
e
P
u
t
R
ig
h
ts
😛
u
t
ri
gh
ts
ar
e
th
e
ri
gh
t
of
th
e
se
ll
er

to
p
u
rc
h
as
e
at
a
ce
rt
ai
n
p
ri
ce
,s
et
ah
ea
d
of
ti
m
e.
If
th
e

co
m
p
an
y
h
as
p
u
t
ri
gh
ts
on
it
s
sh
ar
es
,i
t
m
ay
u
se
th
em
to

re
p
u
rc
h
as
e
sh
ar
es
at
th
at
p
ri
ce
.

4.
F
ix
ed
P
ri
ce
T
en
d
er
O
ff
er
:T
h
e
fi
rm
an
n
ou
n
ce
s
a
n
u
m
be
r
of

sh
ar
es
it
is
lo
ok
in
g
fo
r
an
d
a
fi
xe
d
p
ri
ce
th
ey
ar
e
w
il
li
n
g
to

p
ay
.S
h
ar
eh
ol
d
er
s
d
ec
id
e
w
h
et
h
er
or
n
ot
to
se
ll
th
ei
r
sh
ar
es

to
th
e
co
m
p
an
y.

5.
D
u
tc
h
A
u
ct
io
n
Se
lf
-T
en
d
er
R
ep
u
rc
h
as
e:
T
h
e
co
m
p
an
y

an
n
ou
n
ce
s
a
ra
n
ge
of
p
ri
ce
s
at
w
h
ic
h
th
ey
ar
e
w
il
li
n
g
to

re
p
u
rc
h

as
e.

Sh
ar
eh
ol
d
er
vo
lu
n
ta
ri
ly
st
at
e
th
e
p
ri
ce
at
w
h
ic
h

th
ey
in
d
iv
id
u
al
ly
ar
e
w
il
li
n
g
to
se
ll
.T
h
e
co
m
p
an
y
th
en

co
n
st
ru
ct
s
th
e
su
p
p
ly
-c
u
rv
e,
an
d
th
en
an
n
ou
n
ce
s
th
e

p
u
rc
h
as
e
p
ri
ce
.T
h
e
co
m
p
an
y
re
p
u
rc
h
as
es
sh
ar
es
fr
om
al
l

82
4

To
d
d
S
hi
p
ya

rd
s,

in
19

81
,w

as
th
e
r
st

co
m
p
an

y
to

us
e
th
e

D
ut
ch

A
uc

tio
n
m
et
ho

d
of

st
oc

k
re
p
ur
ch

as
in
g.

S
ha

re
re
p
ur
ch

as
es

(w
hi
ch

us
es

op
en

m
ar
ke

t
re
p
ur
ch

as
es

m
or
e
th
an

D
ut
ch

A
uc

tio
ns

)h
av

e
in
cr
ea

se
d

fr
om

$5
b
ill
io
n
in

19
80

to
$3

49
b
ill
io
n
in

20
05

Fi
g
ur
e
15

.1
6
To
d
d
S
hi
p
ya
rd
s

sh
ar
eh
ol
d
er
s
w
h
o
st
at
ed
a
p
ri
ce
at
or
be
lo
w
th
at
re
p
u
rc
h
as
e

p
ri
ce
(F
ig
u
re
15
.1
6)
.

6.
E
m
p
lo
ye
e
Sh
ar
e
Sc
h
em
e
B
u
y-
B
ac
k:
T
h
e
co
m
p
an
y

re
p
u
rc
h
as
es
sh
ar
es
h
el
d
by
or
fo
r
em
p
lo
ye
es
or
sa
la
ri
ed

d
ir
ec
to
rs
of
th
e
co
m
p
an
y.

So
u
rc
e:
ht
tp
s:
//
w
w
w
.b
ou
n
d
le
ss
.c
om
/f
in
a
n
ce
/d
iv
id
en
d
s/
ca
sh
–

d
iv
id
en
d
-a
lt
er
n
a
ti
ve
s-
-2
/s
ha
re
-r
ep
u
rc
ha
se
s-
-2
/

C
C
-B
Y
-S
A

B
ou
n
d
le
ss
is
a
n
op
en
ly
li
ce
n
se
d
ed
u
ca
ti
on
a
lr
es
ou
rc
e

B
en

e
ts

of
S
ha

re
R
ep

ur
ch

as
es

S
ha

re
re
p
ur
ch

as
es

ar
e
b
en

e
ci
al

w
he

n
th
e
st
oc

k
is

un
d
er
va

lu
ed

,m
an

ag
em

en
t
ne

ed
s
to

m
ee

t
a
n

an
ci
al

m
et
ric

,o
r
th
er
e
is

a
ta
ke

ov
er

th
re
at
.

K
E
Y
P
O
IN
TS

•
If
m
an
ag
em
en
t
fe
el
s
th
e
co
m
p
an
y
is
u
n
d
er
va
lu
ed
,t
h
ey
w
il
l

re
p
u
rc
h
as
e
th
e
st
oc
k,
an
d
th
en
re
se
ll
it
on
ce
th
e
p
ri
ce
of
th
e

sh
ar
es
in
cr
ea
se
s
to
re
fl
ec
t
th
e
ac
cu
ra
te
va
lu
e
of
th
e
fi
rm
.

•
A
m
em
be
r
of
m
an
ag
em
en
t
m
ay
h
av
e
to
m
ee
t
ea
rn
in
gs
p
er

sh
ar
e
(E
P
S)
m
et
ri
cs
w
h
ic
h
ca
n
be
in
cr
ea
se
d
by
in
cr
ea
si
n
g

ea
rn
in
gs
or
lo
w
er
in
g
th
e
n
u
m
be
r
of
ou
ts
ta
n
d
in
g
sh
ar
es
.

Sh
ar
e
re
p
u
rc
h
as
es
d
ec
re
as
e
th
e
n
u
m
be
r
of
ou
ts
ta
n
d
in
g

sh
ar
es
,a
n
d
th
u
s
in
cr
ea
se
E
P
S.

•
T
o
p
re
ve
n
t
a
fi
rm
fr
om
ac
qu
ir
in
g
en
ou
gh
of
a
co
m
p
an
y’
s

st
oc
k
to
ta
ke
it
ov
er
,t
h
e
ta
ke
ov
er
ta
rg
et
m
ay
bu
y
ba
ck
sh
ar
es
,

of
te
n
at
a
p
ri
ce
ab
ov
e
m
ar
ke
t
va
lu
e.

A
co
m
p
an
y
m
ay
se
ek
to
re
p
u
rc
h
as
e
so
m
e
of
it
s
ou
ts
ta
n
d
in
g
sh
ar
es

fo
r
a
n
u
m
be
r
of
re
as
on
s.
T
h
e
co
m
p
an
y
m
ay
fe
el
th
at
th
e
sh
ar
es
ar
e

u
n
d
er
va
lu
ed
,a
n
ex
ec
u
ti
ve
‘s
co
m
p
en
sa
ti
on
m
ay
be
ti
ed
to
ea
rn
in
gs

p
er
sh
ar
e
ta
rg
et
s,
or
it
m
ay
n
ee
d
to
p
re
ve
n
t
a
h
o
st
il
e
ta
k
e
o
ve
r.

82
5

F
or
sh
ar
eh
ol
d
er
s,
th
e
p
ri
m
ar
y
be
n
ef
it
is
th
at
th
os
e
w
h
o
d
o
n
ot
se
ll

th
ei
r
sh
ar
es
n
ow
h
av
e
a
h
ig
h
er
p
er
ce
n
t
ow
n
er
sh
ip
of
th
e
co
m
p
an
y’
s

sh
ar
es
an
d
a
h
ig
h
er
p
ri
ce
p
er
sh
ar
e.
T
h
os
e
w
h
o
d
o
ch
oo
se
to
se
ll

h
av
e
d
on
e
so
at
a
p
ri
ce
th
ey
ar
e
w
il
li
n
g
to
se
ll
at
–
u
n
le
ss
th
er
e
w
as
a

‘p
u
t’
cl
au
se
,i
n
w
h
ic
h
ca
se
th
ey
h
ad
to
se
ll
be
ca
u
se
of
th
e
st
ru
ct
u
re
of

th
e
sh
ar
e,
so
m
et
h
in
g
th
ey
w
ou
ld
h
av
e
al
re
ad
y
kn
ow
n
w
h
en
th
ey

bo
u
gh
t
th
e
sh
ar
es
.

U
n
d
e
rv
a
lu
a
ti
o
n

R
ep
u
rc
h
as
in
g
sh
ar
es
m
ay
al
so
be
a
si
gn
al
th
at
th
e
m
an
ag
er
fe
el
s

th
at
th
e
co
m
p
an
y’
s
sh
ar
es
ar
e
u
n
d
er
va
lu
ed
.I
n
th
is
ev
en
t,
it
w
il
l

ch
oo
se
to
re
p
u
rc
h
as
e
sh
ar
es
,a
n
d
th
en
re
se
ll
th
em
in
th
e
op
en

m
ar
ke
t
on
ce
th
e
p
ri
ce
in
cr
ea
se
s
to
ac
cu
ra
te
ly
re
fl
ec
t
th
e
va
lu
e
of
th
e

co
m
p
an
y.

E
x
e
cu
ti
ve
C
o
m
p
e
n
sa
ti
o
n

In
so
m
e
in
st
an
ce
s,
ex
ec
u
ti
ve
co
m
p
en
sa
ti
on
m
ay
be
ti
ed
to
m
ee
ti
n
g

ce
rt
ai
n
ea
rn
in
gs
p
er
sh
ar
e
(E
P
S)
m
et
ri
cs
.I
fm
an
ag
em
en
t
n
ee
d
s
to

bo
os
t
th
e
E
P
S
of
th
e
co
m
p
an
y
to
m
ee
t
th
e
m
et
ri
c,
s/
h
e
h
as
tw
o

ch
oi
ce
s:
ra
is
e
ea
rn
in
gs
or
re
d
u
ce
th
e
n
u
m
be
r
of
sh
ar
es
.I
fe
ar
n
in
gs

ca
n
n
ot
be
in
cr
ea
se
d
,t
h
er
e
ar
e
a
n
u
m
be
r
of
w
ay
s
to
ar
ti
fi
ci
al
ly
bo
os
t

ea
rn
in
gs
(c
al
le
d
ea
rn
in
gs
m
an
ag
em
en
t)
,b
u
t
s/
h
e
ca
n
al
so
re
d
u
ce

th
e
n
u
m
be
r
of
sh
ar
es
by
re
p
u
rc
h
as
in
g
sh
ar
es
(F
ig
u
re
15
.1
7)
.S
tr
ic
tl
y

sp
ea
ki
n
g,
th
is
is
a
be
n
ef
it
to
th
e
m
an
ag
em
en
t
an
d
ex
ec
u
ti
ve
s,
n
ot

th
e
co
m
p
an
y
or
th
e
sh
ar
eh
ol
d
er
s.
-T
h
w
ar
t.

H
o
st
il
e
T
a
k
e
o
ve
rs

A
co
m
p
an
y
ca
n
ta
ke
ov
er
an
ot
h
er
fi
rm
if
it
h
ol
d
s
en
ou
gh
of
th
e

ot
h
er
ta
ke
ov
er
ta
rg
et
‘s
sh
ar
es
(t
h
e
bu
ye
r
of
th
e
sh
ar
es
is
ca
ll
ed
th
e

bi
d
d
er
,a
n
d
th
e
co
m
p
an
y
it
is
tr
yi
n
g
to
bu
y
is
ca
ll
ed
th
e
ta
ke
ov
er

ta
rg
et
).
T
h
e
bi
d
d
er
is
bu
yi
n
g
th
e
ta
ke
ov
er
ta
rg
et
‘s
sh
ar
es
in
an

at
te
m
p
t
to
p
u
rc
h
as
e
en
ou
gh
to
ow
n
it
.A
ss
u
m
in
g
th
e
fi
rm
d
oe
s
n
ot

82
6

C
E
O
s,

lik
e
M
ar
c
B
en

io

of

S
al
es

fo
rc
e.
co

m
,m

ay
ha

ve
to

m
ee

t
ce

rt
ai
n
n

an
ci
al

ta
rg
et
s
in

or
d
er

to
ea

rn
hi
s
or

he
r
b
on

us
.I
fo

ne
of

th
es

e
ta
rg
et
s
is
E
P
S
,t
he

y
m
ay

ha
ve

an
in
ce

nt
iv
e
to

tr
y
to

in
cr
ea

se
E
P
S
ar
ti

ci
al
ly
.

Fi
g
ur
e
15

.1
7
M
ar
c
B
en
io
ff

w
an
t
to
be
ta
ke
n
ov
er
th
is
w
ay
,t
h
e
ta
ke
ov
er
at
te
m
p
t
is
ca
ll
ed

h
os
ti
le
.I
n
or
d
er
to
p
re
ve
n
t
th
is
fr
om
h
ap
p
en
in
g,
th
e
ta
ke
ov
er
ta
rg
et

n
ee
d
s
to
p
re
ve
n
t
th
e
bi
d
d
er
fr
om
p
u
rc
h
as
in
g
en
ou
gh
of
th
e
sh
ar
es
.

T
o
d
o
th
is
,t
h
e
ta
ke
ov
er
ta
rg
et
w
il
lr
ep
u
rc
h
as
e
it
s
ow
n
sh
ar
es
fr
om

th
e
u
n
fr
ie
n
d
ly
bi
d
d
er
,u
su
al
ly
at
a
p
ri
ce
w
el
la
bo
ve
m
ar
ke
t
va
lu
e.

F
u
rt
h
er
m
or
e,
it
ca
n
p
re
ve
n
t
fu
tu
re
ta
ke
ov
er
at
te
m
p
ts
.C
om
p
an
ie
s

w
it
h
a
lo
t
of
ca
sh
on
th
ei
r
ba
la
n
ce
sh
ee
ts
ar
e
m
or
e
at
tr
ac
ti
ve

ta
ke
ov
er
ta
rg
et
s
be
ca
u
se
th
e
ca
sh
ca
n
be
u
se
d
to
p
ay
d
ow
n
th
e
d
eb
t

in
cu
rr
ed
to
ca
rr
y
ou
t
th
e
ac
qu
is
it
io
n
.S
h
ar
e
re
p
u
rc
h
as
es
ar
e
on
e
w
ay

of
lo
w
er
in
g
th
e
am
ou
n
t
of
ca
sh
on
th
e
ba
la
n
ce
sh
ee
t.

So
u
rc
e:
ht
tp
s:
//
w
w
w
.b
ou
n
d
le
ss
.c
om
/f
in
a
n
ce
/d
iv
id
en
d
s/
ca
sh
–

d
iv
id
en
d
-a
lt
er
n
a
ti
ve
s-
-2
/b
en
ef
it
s-
of
-s
ha
re
-r
ep
u
rc
ha
se
s/

C
C
-B
Y
-S
A

B
ou
n
d
le
ss
is
a
n
op
en
ly
li
ce
n
se
d
ed
u
ca
ti
on
a
lr
es
ou
rc
e

D
ra
w
b
ac

ks
of

S
ha

re
R
ep

ur
ch

as
es

S
ha

re
re
p
ur
ch

as
es

of
te
n
gi
ve

an
ad

va
nt
ag

e
to

in
si
d
er

an
d
ca

n
b
e
us

ed
to

m
an

ip
ul
at
e
n

an
ci
al

m
et
ric

K
E
Y
P
O
IN
TS

•

In
si
d
er
s
ar
e

m
or
e
li
ke
ly
to
kn
ow
if
a
fi
rm
is
u
n
d
er
va
lu
ed
,a
n
d

ar
e
th
er
ef
or
e
m
or
e
li
ke
ly
to
kn
ow
w
h
et
h
er
th
ey
sh
ou
ld
se
ll

th
ei
r
sh
ar
es
in
an
op
en
-m
ar
ke
t
re
p
u
rc
h
as
e.

•
F
in
an
ci
al
ra
ti
os
th
at
u
se
th
e
n
u
m
be
r
of
sh
ar
es
ou
ts
ta
n
d
in
g

ch
an
ge
w
h
en
sh
ar
es
ar
e
re
p
u
rc
h
as
ed
.E
xe
cu
ti
ve
s
an
d

m
an
ag
em
en
t
w
h
os
e
co
m
p
en
sa
ti
on
is
ti
ed
to
th
es
e
m
et
ri
cs

h
av
e
an
in
ce
n
ti
ve
to
m
an
ip
u
la
te
th
em
th
ro
u
gh
sh
ar
e

re
p
u
rc
h
as
es
.

•
Sh
ar
e
re
p
u
rc
h
as
es
ar
e
of
te
n
n
ot
co
m
p
le
te
d
.I
t
is
to
u
gh
to

va
lu
e
th
e
ef
fe
ct
of
a
sh
ar
e
re
p
u
rc
h
as
e
an
n
ou
n
ce
m
en
t
be
ca
u
se

it
is
u
n
kn
ow
n
w
h
et
h
er
it
w
il
lo
cc
u
r
in
fu
ll
.

T
h
er
e
ar
e
a
n
u
m
be
r
of
d
ra
w
ba
ck
s
to
sh
ar
e
re
p
u
rc
h
as
es
.B
ot
h

sh
ar
eh
ol
d
er
s
an
d
th
e
co
m
p
an
ie
s
th
at
ar
e
re
p
u
rc
h
as
in
g
th
e
sh
ar
es

ca
n
be
n
eg
at
iv
el
y
af
fe
ct
ed
.

Sh
ar
es
m
ay
be
re
p
u
rc
h
as
ed
if
th
e
m
an
ag
em
en
t
of
th
e
co
m
p
an
y
fe
el
s

th
at
th
e
co
m
p
an
y’
s
st
oc
k
is
u
n
d
er
va
lu
ed
in
th
e
m
ar
ke
t.
It

82
7

re
p
u
rc
h
as
es
th
e
sh
ar
es
w
it
h
th
e
in
te
n
ti
on
of
se
ll
in
g
th
em
on
ce
th
e

m
ar
ke
t
p
ri
ce
of
th
e
sh
ar
es
in
cr
ea
se
to
ac
cu
ra
te
ly
re
fl
ec
t
th
ei
r
tr
u
e

va
lu
e.
N
ot
ev
er
y
sh
ar
eh
ol
d
er
,h
ow
ev
er
,h
as
a
fa
ir
sh
ot
at
kn
ow
in
g

w
h
et
h
er
th
e
re
p
u
rc
h
as
e
p
ri
ce
is
fa
ir
.T
h
e
re
p
u
rc
h
as
in
g
of
th
e
sh
ar
es

be
n
ef
it
s
th
e
n
on
-s
el
li
n
g
sh
ar
eh
ol
d
er
s
an
d
ex
tr
ac
ts
va
lu
e
fr
om

sh
ar
eh
ol
d
er
s
w
h
o
se
ll
.T
h
is
gi
ve
s
in
si
d
er
s
an
ad
va
n
ta
ge
be
ca
u
se

th
ey
ar
e
m
or
e
li
ke
ly
to
kn
ow
w
h
et
h
er
th
ey
sh
ou
ld
se
ll
th
ei
r
sh
ar
es
to

th
e
co
m
p
an
y
(F
ig
u
re
15
.1
8
).

F
u
rt
h
er
m
or
e,
sh
ar
e
re
p
u
rc
h
as
es
ca
n
be
u
se
d
to
m
an
ip
u
la
te

fi
n
an
ci
al
m
et
ri
cs
.A
ll
fi
n
an
ci
al
ra
ti
os
th
at
in
cl
u
d
e
th
e
n
u
m
be
r
of

sh
ar
es
ou
ts
ta
n
d
in
g
(n
ot
ab
ly
ea
rn
in
gs
p
er
sh
ar
e,
or
E
P
S)
w
il
lb
e

af
fe
ct
ed
by
sh
ar
e
re
p
u
rc
h
as
es
.S
in
ce
co
m
p
en
sa
ti
on
m
ay
be
ti
ed
to

re
ac
h
in
g
a
h
ig
h
en
ou
gh
E
P
S
n
u
m
be
r,
th
er
e
is
an
in
ce
n
ti
ve
fo
r

ex
ec
u
ti
ve
s
an
d
m
an
ag
em
en
t
to
tr
y
to
bo
os
t
E
P
S
by
re
p
u
rc
h
as
in
g

sh
ar
es
.I
n
ac
cu
ra
te
E
P
S
n
u
m
be
rs
ar
e
n
ot
go
od
fo
r
in
ve
st
or
s
be
ca
u
se

th
ey
im
p
ly
a
d
eg
re
e
of
fi
n
an
ci
al
h
ea
lt
h
th
at
m
ay
n
ot
ex
is
t.

F
ro
m
th
e
in
ve
st
or
‘s
st
an
d
p
oi
n
t,
on
e
d
ra
w
ba
ck
of
sh
ar
e
re
p
u
rc
h
as
es

is
th
at
it
‘s
h
ar
d
to
ju
d
ge
h
ow
it
w
il
la
ff
ec
t
th
e
va
lu
at
io
n
of
th
e

co
m
p
an
y.
C
om
p
an
ie
s
of
te
n
an
n
ou
n
ce
re
p
u
rc
h
as
es
an
d
th
en
fa
il
to

co
m
p
le
te
th
em
,b
u
t
re
p
u
rc
h
as
e
co
m
p
le
ti
on
ra
te
s
in
cr
ea
se
d
af
te
r

co
m
p
an
ie
s
w
er
e
fo
rc
ed
to
re
tr
oa
ct
iv
el
y
d
is
cl
os
e
th
ei
r
re
p
u
rc
h
as
e

ac
ti
vi
ty
.I
t
is
d
if
fi
cu
lt
fo
r
sh
ar
eh
ol
d
er
s,
es
p
ec
ia
ll
y
re
la
ti
ve
ly

u
n
in
fo
rm
ed
on
es
,t
o
ju
d
ge
h
ow
th
e
an
n
ou
n
ce
m
en
t
w
il
la
ff
ec
t
th
e

va
lu
e
of
th
ei
r
h
ol
d
in
gs
if
th
er
e
is
n
o
gu
ar
an
te
e
th
at
th
e
fu
ll

an
n
ou
n
ce
d
re
p
u
rc
h
as
e
w
il
lo
cc
u
r.

So
u
rc
e:
ht
tp
s:
//
w
w
w
.b
ou
n
d
le
ss
.c
om
/f
in
a
n
ce
/d
iv
id
en
d
s/
ca
sh
–

d
iv
id
en
d
-a
lt
er
n
a
ti
ve
s-
-2
/d
ra
w
ba
ck
s-
of
-s
ha
re
-r
ep
u
rc
ha
se
s/

C
C
-B
Y
-S
A

B
ou
n
d
le
ss
is
a
n
op
en
ly
li
ce
n
se
d
ed
u
ca
ti
on
a
lr
es
ou
rc
e

82
8

M
ar
th
a
S
te
w
ar
t
w
as

co
nv

ic
te
d
of

in
si
d
er

tr
ad

in
g,

w
hi
ch

is
no

t
th
e
sa

m
e
as

in
si
d
er
s
ch

oo
si
ng

w
he

th
er

to
se

ll
th
ei
r
sh

ar
es

in
a
sh

ar
e
re
p
ur
ch

as
e.

In
si
d
er
s
ar
e

st
ill
at

an
ad

va
nt
ag

e
b
ec

au
se

th
ey

w
ill
kn

ow
no

t
to

se
ll
d
ur
in
g
th
e
sh

ar
e

re
p
ur
ch

as
e.

Fi
g
ur
e
15

.1
8
M
ar
th
a
S
te
w
ar
t

D
iv
id
en

d
R
ei
nv

es
tm

en
ts

D
iv
id
en

d
re
in
ve

st
m
en

t
p
la
ns

(D
R
IP
s)

au
to
m
at
ic
al
ly

re
in
ve

st
ca

sh
d
iv
id
en

d
s
in

th
e
st
oc

K
E
Y
P
O
IN
TS

•
D
R
IP
s
h
el
p
sh
ar
eh
ol
d
er
s
re
in
ve
st
th
ei
r
d
iv
id
en
d
s
in
th
e

u
n
d
er
ly
in
g
st
oc
k
w
it
h
ou
t
h
av
in
g
to
w
ai
t
fo
r
en
ou
gh
m
on
ey
to

bu
y
a
w
h
ol
e
n
u
m
be
r
of
sh
ar
es
.I
t
al
so
m
ay
al
lo
w
th
em
to

oi
d
so

m
e
br
ok
er
ag
e

fe
es

•
D
R
IP
s
h
el
p
st
ab
il
iz
e
st
oc
k
p
ri
ce
s
by
in
h
er
en
tl
y
en
co
u
ra
gi
n
g

lo
n
g-
te
rm
in
ve
st
m
en
t
in
st
ea
d
of
ac
ti
ve
-m
an
ag
em
en
t,
w
h
ic
h

m
ay
ca
u
se
vo
la
ti
li
ty
.

•
D
R
IP
s
ar
e
ge
n
er
al
ly
as
so
ci
at
ed
w
it
h
p
ro
gr
am
s
of
fe
re
d
by
th
e

co
m
p
an
y.
H
ow
ev
er
,b
ro
ke
ra
ge
fi
rm
s
m
ay
of
fe
r
si
m
il
ar

re
in
ve
st
m
en
t
p
ro
gr
am
s
ca
ll
ed
“s
yn
th
et
ic
D
R
IP
s”
.

In
so
m
e
in
st
an
ce
s,
a
co
m
p
an
y
m
ay
of
fe
r
it
s
sh
ar
eh
ol
d
er
s
an

al
te
rn
at
iv
e
op
ti
on
to
re
ce
iv
in
g
ca
sh
d
iv
id
en
d
s.
T
h
e
sh
ar
eh
ol
d
er

ch
oo
se
s
to
n
ot
re
ce
iv
e
d
iv
id
en
d
s
d
ir
ec
tl
y
as
ca
sh
;i
n
st
ea
d
,t
h
e

sh
ar
eh
ol
d
er
‘s
d
iv
id
en
d
s
ar
e
d
ir
ec
tl
y
re
in
ve
st
ed
in
th
e
u
n
d
er
ly
in
g

eq
u
it
y.
T
h
is
is
ca
ll
ed
a
d
iv
id
en
d
re
in
ve
st
m
en
t
p
ro
gr
am
or
d
iv
id
en
d

re
in
ve
st
m
en
t
p
la
n
(D
R
IP
).

T
h
e
p
u
rp
os
e
of
th
e
D
R
IP
is
to
al
lo
w
th
e
sh
ar
eh
ol
d
er
to
im
m
ed
ia
te
ly

re
in
ve
st
h
is
or
h
er
d
iv
id
en
d
s
in
th
e
co
m
p
an
y.
Sh
ou
ld
th
e

sh
ar
eh
ol
d
er
ch
oo
se
to
d
o
th
is
on
h
is
or
h
er
ow
n
,s
/h
e
w
ou
ld
h
av
e
to

w
ai
t
u
n
ti
le
n
ou
gh
ca
sh
ac
cu
m
u
la
te
s
to
bu
y
a
w
h
ol
e
n
u
m
be
r
of

sh
ar
es
an
d
s/
h
e
w
ou
ld
al
so
in
cu
r
br
ok
er
ag
e
fe
es
( F
ig
u
re
15
.1
9)
.

P
ar
ti
ci
p
at
in
g
in

a
D
R
IP

,h
ow
ev
er
,d
oe
s
n
ot
m
ea
n
th
at
th
e

re
in
ve
st
m
en
t
of
th
e
d
iv
id
en
d
s
is
fr
ee
fo
r
th
e
sh
ar
eh
ol
d
er
.S
om
e

D
R
IP
s
ar
e
fr
ee
of
ch
ar
ge
fo
r
p
ar
ti
ci
p
an
ts
,w
h
il
e
ot
h
er
s
d
o
ch
ar
ge

fe
es
an
d
/o
r
p
ro
p
or
ti
on
al
co
m
m
is
si
on
s.

D
R
IP
s
h
av
e
be
co
m
e
p
op
u
la
r
m
ea
n
s
of
in
ve
st
m
en
t
fo
r
a
w
id
e
va
ri
et
y

of
in
ve
st
or
s
as
D
R
IP
s
en
ab
le
th
em
to
ta
ke
ad
va
n
ta
ge
of
d
ol
la
r-
co
st

av
er
ag
in
g
w
it
h
in
co
m
e
in
th
e
fo
rm
of
co
rp
or
at
e
d
iv
id
en
d
s
th
at
th
e

co
m
p
an
y
is
p
ay
in
g
ou
t.
N
ot
on
ly
is
th
e
in
ve
st
or
gu
ar
an
te
ed
th
e

re
tu
rn
of
w
h
at
ev
er
th
e
d
iv
id
en
d
yi
el
d
is
,b
u
t
s/
h
e
m
ay
al
so
ea
rn

w
h
at
ev
er
th
e
st
oc
k
ap
p
re
ci
at
es
to
d
u
ri
n
g
h
is
or
h
er
ti
m
e
of

ow
n
er
sh
ip
.H
ow
ev
er
,s
/h
e
is
al
so
su
bj
ec
t
to
w
h
at
ev
er
th
e
st
oc
k
m
ay

d
ec
li
n
e
to
,a
s
w
el
l.

82
9

B
ro
ke

ra
ge

r
m
s
lik
e
C
ha

rle
s
S
ch

w
ab

ea
rn

m
on

ey
b
y
ch

ar
gi
ng

a
b
ro
ke

ra
ge

fe
e
fo
r

ex
ec

ut
in
g
tr
an

sa
ct
io
ns

.T
hu

s,
p
ar
tic

ip
at
in
g
in

a
D
R
IP

he
lp
s
sh

ar
eh

ol
d
er
s
av

oi
d
so

m
e

or
al
lo

ft
he

fe
es

th
ey

w
ou

ld
oc

cu
r
if
th
ey

re
in
ve

st
ed

th
e
d
iv
id
en

d
s
th
em

se
lv
es

Fi
g
ur
e
15

.1
9
C
ha
rle
s
S
ch
w
ab

T
h
er
e
is
an
ad
va
n
ta
ge
to
th
e
th
e
co
m
p
an
y
m
an
ag
in
g
th
e
D
R
IP
,t
oo
.

D
R
IP
S
in
h
er
en
tl
y
en
co
u
ra
ge
lo
n
g-
te
rm
in
ve
st
m
en
t
in
th
e
sh
ar
es
,

w
h
ic
h
h
el
p
s
to
m
it
ig
at
e
so
m
e
of
th
e
vo
la
ti
li
ty
as
so
ci
at
ed
w
it
h
ac
ti
ve
–

tr
ad
in
g.
D
R
IP
s
h
el
p
to
st
ab
il
iz
e
th
e
st
oc
k
p
ri
ce
.

T
h
e
n
am
e
“D
R
IP
”
is
ge
n
er
al
ly
as
so
ci
at
ed
w
it
h
p
ro
gr
am
s
ru
n
by
th
e

d
iv
id
en
d
-p
ay
in
g
co
m
p
an
y.
H
ow
ev
er
,s
om
e
br
ok
er
ag
e
fi
rm
s
al
so

of
fe
r
si
m
il
ar
p
la
n
s
w
h
er
e
sh
ar
eh
ol
d
er
s
ca
n
ch
oo
se
to
h
av
e
th
ei
r
ca
sh

d
iv
id
en
d
s
re
in
ve
st
ed
in
st
oc
ks
fo
r
li
tt
le
or
n
o
co
st
.T
h
is
is
ca
ll
ed
a

sy
n
th
et
ic
D
R
IP
.

So
u
rc
e:
ht
tp
s:
//
w
w
w
.b
ou
n
d
le
ss
.c
om
/f
in
a
n
ce
/d
iv
id
en
d
s/
ca
sh
–

d
iv
id
en
d
-a
lt
er
n
a
ti
ve
s-
-2
/d
iv
id
en
d
-r
ei
n
ve
st
m
en
ts
—
2/

C
C
-B
Y
-S
A

B
ou
n
d
le
ss
is
a
n
op
en
ly
li
ce
n
se
d
ed
u
ca
ti
on
a
lr
es
ou
rc
e

83
0

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