(En) DF FINANCIACIÓN TEMA 1 2021 - 2022

Degree in Business Administration and
Management
FINANCIAL MANAGEMENT:
FINANCING
Year 2
FINANCIAL MANAGEMENT:
FINANCING: AGENDA
Topic 1.- The financial structure of the company
Topic 2.- Sources of corporate finance
Topic 3.- Own financing
Topic 4.- Short-term loans
Topic 5.- The credit policy
Topic 6.- Commercial discounting &
financial discounting
Topic 7.- Factoring & Forfaiting
Topic 8.- The financing of purchases
Topic 9.- Long-term loans
Topic 10.- Leasing
Topic 11.- Promissory notes & bonds
Topic 12.- Weighted average cost of capital
Topic 1.
The financial structure
of the company
INDEX
INDEX
1. What is financial management?
FUNCTIONS OF FINANCE MANAGEMENT:
1. RAISING THE FUNDS NEEDED TO MAKE INVESTMENTS

2. ENSURE AVAILABILITY OF FUNDS TO FACE ORDINARY PAYMENTS
(Raw materials, Manpower, suppliers, administration…)
3. CORRECT BALANCE BETWEEN SHORT AND LONG TERM (SECURITY)
4. CASH MANAGEMENT
5. TAX PAYMENTS
6. DIVIDEND PAYMENTS (YIELD)
FINANCIAL MANAGEMENT - TWO SUB-FUNCTIONS:
✓RAISING CAPITAL Sources of funding
✓MATERIALISATION OF INVESTMENTS Objectives of the

company
WHAT IS FINANCING?
FINANCING CONSISTS ON OBTAINING THE FINANCIAL

RESOURCES NECESSARY FOR THE OPERATION OF THE COMPANY,
TAKING INTO ACCOUNT THE OBJECTIVES OF THE BUSINESS AND
ACCORDING TO THE MOST ADVANTAGEOUS:
✓ COST
✓ TERM
✓ AMOUNT
HOW TO RAISE THESE FUNDS?

1. THESE MONETARY RESOURCES ARE ORIGINATED FROM SOURCES
OF FINANCES.
2. HOW WE MANAGE THESE SOURCES MUST BE RELATED TO THE
COMPANY’S OBJECTIVE OF MAXIMISING SHAREHOLDER VALUE.
RESPONSABILITY OF THE FINANCE DEPARMENT

1. THE ESTABLISHMENT OF THE MOST APPROPRIATE FINANCIAL
STRUCTURE IS AN IMPORTANT DECISION FOR THE COMPANY'S
FINANCIAL MANAGEMENT.
HOW WE CAN RAISE THESE FUNDS:

1. CAPITAL MARKETS: focus on Long-Term (L/T) market. (Loans,
Borrowing, Shares, Bonds…)
2. MONEY MARKETS: Mainly dedicated ON Short-Term (S/T).
(Promissory notes, Bills of Exchange / Commercial Bills, Treassury
Bills, Credits, Loans…)
HOW WE CAN RAISE THESE FUNDS:

EXTRA INFO
EXTRA INFO
EXTRA INFO
EXTRA INFO
INDEX
2. The financial situation of the company
THE FINANCIAL SITUACION EXPLAINS:
1. AMOUNT IN € OF EACH ACCOUNT.
2. ORIGIN OF THE FUNDS.
3. RESOURCES THAT THE COMPANY MANAGE.
THE TOOLS THAT WE MANAGE TO CROSSCHECK:
1. THE ACCOUNT FIGURES

2. BALANCE SHEET (static photo)
3. CASH-FLOWS
BALANCE SHEET → ASSETS = LIABILITIES:
The representation of INVESTMENTS & FUNDS are materialiesed in
the BALANCE SHEET
ASSETS LIABILITIES
INVESTMENTS FUNDS
LIQUIDITY: FEASIBILITY OF A GOOD TO BECOME CASH (IN TIME)
ASSETS RANKING
COMPUTER APPLICATIONS
INTANGIBLE
R&D
ASSETS
PATENTS & TRADEMARKS
BUILDING & LAND
FIX ASSETS
EQUIPMENTS PROPERTY
>1year FACILITIES
TANGIBLE ASSETS
MACHINERY
FINANCIAL ASSETS L/T SHAREHOLDINGS
RAW MATERIAL
STOCKS WIP
FINISH PRODUCT
CURRENT ACCOUNT CUSTOMERS
ASSETS RECEIVABLE DEBTORS
FINANCIAL S/T LOANS TO COMPANIES
<1year INVESTMENT S/T S/T SHAREHOLDINGS
CASH & BANK TREASURY
Accounts payable for goods 132k€ Impairment of constructions 6k€

Accounts payable for services 40k€ Impairment of inventories of other
Accounts receivable, bill of exchange 10k€ supplies 1k€
Accumulated depreciat of constructions 30k€ Profits of the year 5k€
Advances to suppliers 12k€ Interest payable to credit institutions 3k€
Capital grants 40k€ Inventories of other supplies 1,5k€
Capital stock 150k€ Land 140k€
Cash 84k€ Salary paid in advance 3k€
Cash equivalents 500k€ Short-term debt with credit institutions
Constructions 120k€ 150k€
Expenses paid in advance 5,5k€ Short-term holdings in equity 6k€
VAT payable 5k€
Cuentas a pagar por bienes 132k€ Deterioro de las construcciones 6k€

Cuentas a pagar por servicios 40k€ Deterioro de existencias de otros
Cuentas por cobrar, efectos 10k€ suministros 1k€
Depreciac acumulada de construcciones Beneficios del ejercicio 5k€
30k€ Intereses a pagar a entid de crédito 3k€
Anticipos a proveedores 12k€ Existencias de otros suministros 1,5k€
Subvenciones de capital 40k€ Terrenos 140k€
Capital social 150k€ Salario pagado por adelantado 3k€
Caja 84k€ Deudas a c/p con entid de crédito 150k€
Equivalentes de tesorería 500k€ Participaciones en capital a c/p 6k€
Construcciones 120k€ IVA a pagar 5k€
Gastos pagados por adelantado 5,5k€
BALANCE SHEET → FIX & CURRENT ASSETS:
1. Renewal cycle/long-term cycle of fixed assets: average
time THAT takes the company to recover its investments in non-
current assets and its duration depends on the useful life of the
fixed assets.
2. Operating cycle or short-term cycle: average time THAT
takes the company to recover its investments in current assets
and its duration depends on the average maturity period.
PERMANENT FUNDS & LIABILITIES
Own Financing Depreciation
Shareholders or
Retained Earnings
Self-Financing
equity Generated by the company
PERMANENT To be retained Capital Stock
FUNDS Loan
>1year Leasing
L/T Loan
Promissory note
External Financing
Liabilities Generated by the outsideFactoring
To be returned Credit policy
CURRENT
LIABILITIES Commercial discount
<1year S/T Loan
Suppliers
ENFORCEABILITY ORIGIN
RANKING
OWNERSHIP AVAILABILITY
ENFORCEABILITY: LIMIT FOR RETURNING THE FUNDS TO THE CREDITOR
BALANCE SHEET → LIABILITY (ORIGIN OF FUNDS):
1. The company needs funds for the development of the productive
activity and the acquisition of goods.
2. The financial resources appear on the liabilities side of the
balance sheet: in other words, the liabilities side shows the origin
of the resources used.
CASH FLOW → DEFINITION AND TYPES
1. net balance of cash moving into and out.
1. debts & interests payments
MOVING 2. taxes payments

OUT 3. Investments financed with own capital
4. Dividends payments
2. Types of cash flows:

✓ Operating cash flow: Normal activity
✓ Financing cash flow: funds reception
✓ Investment cash flow: purchases & sales assests
INDEX
3. The economic situation of the company
WHAT THE ECONOMIC SITUATION REFERS TO?
CAPACITY TO GENERATE RESULTS (PROFIT OR LOSSES). → P&L
P&L
+ Sales
- Variable costs
= MOVC
- Fix costs
+/- Other Profits and Losses
= EBITDA Earnings Before Interest, Taxes, Depreciation & Amortization
- Depreciation & Amortization Result without taking into account the way of financing
= EBIT Earnings Before Interest & Taxes
+/- Financial Profits and Losses
= EBT Earnings Before Taxes
- Corporate taxes From the net income it is shared the dividends
= Net Income
INDEX
4. THE FINANCIAL EQUILIBRIUM
4.1 FINANCIAL EQUILIBRIUM RULES
1. ASSETS DURATION Ξ LIABILITIES DURATION

(CRISIS)
2. ASSETS LIQUIDITY Ξ LIABILITIES ENFORCEABILITY
(INSOLVENCY)
3. ASSETS AMOUNT Ξ LIABILITIES
4.2. WAYS OF LOOKING AT FINANCIAL EQUILIBRIUM
Analyse whether it maintains a balance between its

investments and the sources that finance them.
HOW?
 RATIOS ANALYSIS
 WORKING CAPITAL / REVOLVING FUND
 CASH GENERATION CYCLES
4.2.1 FINANCIAL RATIOS
A ratio is a quotient between two accounting magnitudes
TYPES?
LIQUIDITY: short-term money SOLVENCY: meeting debts

SOLVENCY RATIO
key metric used to measure an enterprise’s ability to meet its long-term debt obligations
Solvency Ratios
and is used often by prospective business lenders
Determines the proportion of a business’ total capital that is financed using debt
Debt-to-Capital
Total Debts / Total Liabilities
Percentage of financing contributed by creditors as compared to that of equity investors
Leverage Ratio
Total Debts / Total Shareholder's Equity
Payment Capacity to face debts with the EBITDA (Cash flow + amortization)
capacity Ratio Total Debts / EBITDA
Interest Number of times that a company’s profits can be used to pay interest charges on its debts
Coverage Ratio Company's profits (Cash Flow) / Interest payments
CASE STUDY 1
Given the following balance sheet of a company (in millions of euros) and knowing
that the profit before tax is 2,500 euros.
Interpret its financial equilibrium by means of ratios.
ASSETS 31/12/2019 LIABILITIES 31/12/2019
NON-CURRENT ASSETS 3.600 SHAREHOLDERS EQUITY 6.500
Intangible fixed assets 1.500 Capital stock 4.000
Tangible fixed assets 1.600 Retained earnings 1.400
Financial fixed assets 500 P&L 1.100
CURRENT ASSETS 11.400 NON-CURRENT LIABILITIES 2.500
Stocks 150 L/T debts 2.500
Debtors 6.500 CURRENT LIABILITIES 6.000
Financial investment S/T 900 S/T debts 6.000
Cash & Banks 3.850
TOTAL ASSETS 15.000 TOTAL LIABILITIES 15.000
CASE STUDY 1
LIQUIDITY RATIOS:
CURRENT RATIO = CURRENT ASSETS/CURRENT LIABILITIES =

= 11.400€/6.000€ = 1,9
ACID TEST (QUICK RATIO) = (CURRENT ASSETS – STOCKS)/CURRENT LIABILITIES =
= (11.400€ - 150€) / 6.000€ = 1,875
CASH RATIO = CASH & EQUIVALENT / CURRENT LIABILITIES =
= 3.850€ / 6.000€ = 0,64
SOLVENCY RATIOS:
DEBT-TO-CAPITAL = TOTAL DEBTS / TOTAL LIABILITIES =

= (2.500€ + 6.000€) / 15.000€ = 0,57
LEVERAGE RATIO = TOTAL DEBTS / TOTAL SHAREHOLDER'S EQUITY =
= (2.500€ + 6.000€) / 6.500€ = 1,31
PAYMENT CAPACITY RATIO = TOTAL DEBTS / EBITDA =
= (2.500€ + 6.000€) / 2.500€ = 3,4
4.2.2 WORKING CAPITAL
Starting point:
NON current Permanent

assets funds
Current
Current assets
liabilities
MINIMUM FINANCIAL EQUILIBRIUM GENERAL LAW
Liability enforceability similar to investment liquidity

This is not always the case. As a general rule, it is also necessary for
permanent capital to finance part of the current assets.
WHY?
✓ Part of the current assets behave as if they were fixed assets.
✓ Security levels of "stock of stock": remain over time
If they behave as Fixed Assets, why finance them with short-term maturing capital?
Equilibrium law exception:
NON current Permanent

assets funds
Current
Current assets
liabilities
DEFINITION:
Revolving Funds / Working capital: Permanent capitals financing current assets

Current assets can behave in two ways:
1ª) Stable part / Permanent

with the aim of funds
permanence
2 parts
2ª) Variable part S/T Funds

Stock-outs can occur for three reasons:
Losses/Impairments in current
assets
Unforeseen events in reception,

manufacturing, sales
Continuous renewal
Permanent
funds
1 WC = Current assets – Current liabilities

2 WC = Permanent funds – Non current assets
3 WC = CA – CL = RM + WIP + FP + Cust + € – P
The working capital is interpreted as:
1. Represents the portion of Current Assets financed through Fixed

Assets.
2. It is a Guarantee or Solvency Fund
3. Fully financing current assets with short-term loans would be
dangerous: Risk to the "operating cycle".
The negative point of the working capital:
Higher cost of the L/T debt (interest rate)

4.2.2 WORKING CAPITAL CASE STUDY 2
ASSETS 31/12/2019 31/12/2018 LIABILITIES 31/12/2019 31/12/2018
NON CURRENT ASSETS 3.600 3.000 SHAREHOLDERS’ EQUITY 6.500 5.400

Intangible fixed assets 1.500 1.500 Capital stocks 4.000 4.000
Tangible fixed assets 1.600 1.000 Retained earnings 1.400 1.200
Financial fixed assets 500 500 P&L 1.100 200
CURRENT ASSETS 11.400 7.500 NON CURRENT LIABILITIES 2.500 1.500
Stocks 150 300 L/T Debts 2.500 1.500

Customers 6.500 4.000 CURRENT LIABILITIES 6.000 3.600
S/T financial investments 900 900 Suppliers 4.500 3.000
Cash & banks 3.850 2.300 Creditors 1.500 6.000

TOTAL ACTIVO 15.000 10.500 TOTAL PASIVO 15.000 10.500
4.2.2 WORKING CAPITAL CASE STUDY 2
1 WC = Current assets – Current liabilities

WC = 11.400€ - 6.000€ = 5.400€
2 WC = Permanent funds – Non current assets

WC = (6.500€ + 2.500€) – 3.60 € = 5.400€
3 WC = CA – CL = RM + WIP + FP + Cust + € – P
WC = [(150€ + 300€)/2 + (6.500€ + 4.000€)/2 + (3.850€ +
2.300€)/2] – [(4.500€ + 3.000€)] = 4.800€
4.2.3. CASH GENERATION CYCLES
The internal cycles of the company:
LONG CYCLE Fix Fix structure of

investments the company
Investments/ Company's
SHORT CYCLE Stocks in operating
current assets activity
Non current assets
adquisition
Purchases
Raw materials
warehouse Production
Technical
CASH amortization
Staff and transformation costs
Finish
Customers products
warehouse
Collection Sales
Non current assets

sales
4.2.3. THE FIXED ASSEST RENEWAL CYCLE (L/T)
4.2.3. THE FIXED ASSEST RENEWAL CYCLE (L/T)
The fixed asset renewal cycle or long-term cycle:

✓ duration is determined by the useful life of the
assets.
✓ The depreciation is gradually incorporated into
production costs through a process of amortisation.
4.2.3. THE OPERATING CYCLE (SHORT-TERM)
AVERAGE PERIOD OF ECONOMIC MATURITY:
DEFINITION:
Measures the average time that elapses from the time the
company INVESTS a monetary unit in raw materials until
it recovers it through the collection of the sales made
APEM is configured by 4 subperiods:
4.2.3. CASH GENERATION CYCLES: CALCULATION
Average period of economic maturity
m1 m2 m3 m4
m1=365/r1
m1= 365/(C1/c1)
m2=365/r2
m2= 365/(C2/c2)
m3=365/r3
m3= 365/(C3/c3)
m4=365/r4
m4= 365/(C4/c4)
AVERAGE PERIOD OF FINANCIAL MATURITY:
DEFINITION:
Measures the average time that elapses from the time the
company PAYS out a monetary unit in raw materials until
it recovers it through the collection of the sales made.
Why the average period of financial maturity?
Part of the operating cycle is financed by payment deferrals granted by suppliers.

APFM is configured by 5 subperiods:
The 4 subperiodss of the APEM: (m1, m2, m3, m4) Financing needs
M5 = Average subperiod of payment (to suppliers) Financing resource

4.2.3. CASH GENERATION CYCLES CASE STUDY 3
ASSETS LIABILITIES
NON CURRENT ASSEST 350M€ SHAREHOLDERS’ EQUITY 150M€
Lands 100M€ Capital Stock 50M€
Buildings 150M€ Earnings retained 100M€
Machinery 100M€ L/T DEBTS 130M€
CURRENT ASSEST 185M€ L/T Loans 100M€
Stock Finished Product 40M€ Company capital Loan 30M€
Stock WIP 60M€ S/T DEBTS 255M€
Stock RM 20M€ S/T Loans 150M€
Customers 50M€ Creditors 30M€
Cash & Banks 15M€ Suppliers 75M€
TOTAL 535M€ TOTAL 535M€
Invoicing: 220M€ Raw material consumption: 350M€
Total cost (of the sales): 250M€ Production (in cost term): 475M€
Purchases financed: 310M€
4.2.3. CASH GENERATION CYCLES CASE STUDY 3
Average Period of Economic Maturity
Average Period of Financial Maturity

INDEX
5. THE ECONOMIC EQUILIBRIM
WAYS OF STUDING ECONOMIC EQUILIBRIUM IN A COMPANY
Accounting tool used: BALANCE SHEET
HOW?
 Economical Ratios Analysis
 Economical Profitability
 Breakeven point
 Operative Leverage
5.1. ECONOMIC RATIOS
Types?
PROFITABILITY: Profits EFFICIENCY: Well

expected from an investment performance of the assets
5.1. ECONOMIC RATIOS CASE STUDY 4
Define the económic equilibrum through the ratios.

P&L ASSETS 31/12/2019 LIABILITIES 31/12/2019
Income by sales 3.700M€ NON-CURRENT ASSETS 3.600M€ SHAREHOLDERS EQUITY 6.500M€
Costs 2.580M€ Intangible fixed assets 1.500M€ Capital stock 4.000M€
Amortization 320M€ Tangible fixed assets 1.600M€ Retained earnings 1.400M€
EBIT 800M€ Financial fixed assets 500M€ P&L 1.100M€
Financial expenses 425M€ CURRENT ASSETS 11.400M€ NC LIABILITIES 2.500M€
EBT 375M€ Stocks 150 M€ L/T debts 2.500M€
Taxes 95M€ Debtors 6.500M€ CURRENT LIABILITIES 6.000M€
NET Result 280M€ Financial invest S/T 900M€ S/T debts 6.000M€
Dividends 112M€ Cash & Banks 3.850M€
Earnings retained 168M€ TOTAL ASSETS 15.000M€ TOTAL LIABILITIES 15.000M€
5.2. ECONOMIC PROFITABILITY
MEANING
✓ U.m. gained by the company (Bº) per u.m invest in the assets
✓ Before interest & taxes. Rough profitablity
✓ The ability of assets to generate profits, irrespective of how they have been
financed
5.2. ECONOMIC PROFITABILITY
Margin X Rotation
u.m. earned by the company for each u.m. sold

(before remuneration of the sources of finance used)
Extent to which the asset is used to make sales
• Differentiation strategy If ↑ Margin

•Type of products: Luxury ↑ Economic
• Cost minimisation strategy If ↑ turnover profitability
• Large firms: economies of scale
• Product type: Staples
5.3. BREAKEVEN POINT
Sales (in units = q*) in order to have null profit.
FORMULA (where it comes from):
If BE = 0 (Pv-Cv)q* - CF
5.3. BREAKEVEN POINT: GRAPHIC
GRAPHIC REPRESENTATION
Incomes Sales = q x Price
Costs Earnings
Total costs = VC + FC = q x Cu + FC
Fix Cost (FC)

Losses
Breakeven point
q* Sales (in units)

5.3. BREAKEVEN POINT CASE STUDY 5
Define the breakeven point of the company

ASSETS 31/12/2019 LIABILITIES 31/12/2019 Sales 67.500
NON CURRENT ASSETS 17.000 SHAREHOLDERS’ EQUITY 21.300 Units sold 7.500k
Machinery 13.500 Capital Stock 1.000
Buildings 8..000 Earnings retained 15.500

Cost of the sales 35.000
Cummulated amortization -4.500 P&L 4.800
Raw materials consumtion 20.000
CURRENT ASSETS 25.400 NON CURRENT DEBTS 18.500
Fix Costs:
Stocks L/T Debts 18.500
Rental 2.000
Raw materials 10.500 CURRENT DEBTS 2.600
Cost of employees 6.000
WIP 5.600 Suppliers 1.900
Customers 6.300 Creditors 700

Amortisation and depreciation 1.000
Cash & Banks 3.000 Insurances 200
TOTAL ASSETS 42.400 TOTAL LIABILITIES 42.400 Cost of the debt 5%

5.3. BREAKEVEN POINT CASE STUDY 5
Define the breakeven point of the company

EXTRA INFO
5. El equilibrio económico de la empresa
5.4. EL GRADO DE APALANCAMIENTO OPERATIVO
DEFINICIÓN:
Proporción entre los costes fijos y los costes variables de una empresa.
CÁLCULO:
INTERPETACIÓN:
• Número de veces que los costes de estructura de una empresa superan a los
costes variables
• Relacionado con estructura empresa AF Ξ AC. Un aumento de costes fijos en
sustitución de variables automatización proceso ∆ Activo
• Efecto palanca: una pequeña variación de los costes fijos provoca
variaciones proporcionalmente mayores en la rentabilidad de la empresa
EXTRA INFO
DEFINICIÓN:
Variación (%) que experimenta el beneficio económico como consecuencia de
una variación (%) en el número de unidades vendidas (q)
% Variación Ventas % Variación Bº Económico
Elasticidad
CÁLCULO:
1 2 3
EXTRA INFO
INTERPRETACIÓN:
• Con un GAO ALTO: un aumento de las ventas provocará un

incremento de los costes variables, pero no de los costes fijos, siendo
el crecimiento de los costes totales menor que el de los ingresos,
aumentando más el beneficio total
• Con un GAO BAJO: lo contrario
Alto Grado Apalancamiento Un cambio relativamente pequeño en las ventas da como

Operativo resultado un cambio relativamente mayor en el BAII
Empresas con costes Fijos elevados (en

relación a los variables)
Bajo Grado Apalancamiento Un cambio relativamente pequeño en las ventas da como

Operativo resultado un cambio menor en el BAII
Empresas con costes Fijos bajos (en
relación a los variables)
EXTRA INFO
INTERPRETACIÓN:
La empresa buscará un nivel de AO mayor cuanto mayor sea:
• Las expectativas de ventas (ciclo)

• La competitividad de la empresa (cuota mercado)
• La capacidad de crecimiento de la empresa (disponibilidad de fondos)
En épocas de recesión → interesará GAO bajo (CF bajos)
En épocas de auge → interesará GAO alto (CF elevados)

EXTRA INFO
CASE STUDY 6
Con los datos del caso práctico anterior, calcular el grado de apalancamiento operativo
mediante todos los métodos posibles:
Activo 31/12/2019 Pasivo 31/12/2019
ACTIVO FIJO PATRIMONIO NETO Ventas 67.500
17.000 21.300
Maquinaria Capital Social Número de unidades vendidas (en miles) 7.500
13.500 1.000
Construcciones Reservas Coste de las ventas 35.000
8..000 15.500
Amortización acumulada Pérdidas y Ganancias Compra de Materia Prima 20.000
-4.500 4.800
ACTIVO CORRIENTE PASIVO NO CORRIENTE Costes Fijos:
25.400 18.500
Existencias Deudas a largo plazo Coste de Alquiler 2.000
18.500
Materias primas PASIVO CORRIENTE Coste de Mano de Obra 6.000
10.500 2.600
Productos en curso Proveedores Amortizaciones y Depreciaciones 1.000
5.600 1.900
Clientes 6.300 Acreedores 700
Caja y Bancos 3.000
TOTAL ACTIVO 42.400 TOTAL PASIVO 42.400
INDEX
6. THE PROFITABILITY BY DIVIDENS
6.1. WHAT IS A DIVIDENDS?
✓ Distribution of cash or stock to a class of shareholders in a company.
Typically, dividends are drawn from a company's retained earnings.
6.2. WHY ARE SHARED DIVIDENDS?

✓ Shareholders invest in the company in order to get a profit back.
✓ The company is the one which decides if they are going to be paid.
6.3. PROFITABILITY BY DIVIDENDS
6. THE PROFITABILITY BY DIVIDENS
6.3. PROFITABILITY BY DIVIDENDS CASE STUDY 7
✓ A company has 1.000 share with a quotation of 75,2€/share.

✓ The net earnings of the exercise are 451.600€
✓ The payout is 60%
Calculate the Profitability by dividends
GLOSSARY OF TERMS
Liquidez de los activos Liquidity of assets
Exigibilidad de los pasivos Enforceability of liabilities
Flujos de caja libres Free cash flows
Ratios financieros de liquidez Financial liquidity ratios
Ratios financieros de solvencia Financial solvency ratios
Fondo de maniobra Working capital
Período medio de maduración económico Avg period of economic maturity
Período medio de maduración financiero Avg period of financial maturity
Ratios económicos de rentabilidad Economic profitability ratios
Ratios económicos de eficiencia Economic efficiency ratios
Rentabilidad económica Economic profitability
Punto muerto de las ventas Sales break-even point
Apalancamiento operativo Operating leverage
Grado de apalancamiento operativo Degree of operating leverage
Rentabilidad por dividendo Dividend yield
Payout Payout

(En) DF FINANCIACIÓN TEMA 1 2021 - 2022

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Degree in Business Administration and

1. RAISING THE FUNDS NEEDED TO MAKE INVESTMENTS

FINANCIAL MANAGEMENT - TWO SUB-FUNCTIONS:

✓RAISING CAPITAL Sources of funding

✓MATERIALISATION OF INVESTMENTS Objectives of the

FINANCING CONSISTS ON OBTAINING THE FINANCIAL

HOW TO RAISE THESE FUNDS?

RESPONSABILITY OF THE FINANCE DEPARMENT

HOW WE CAN RAISE THESE FUNDS:

HOW WE CAN RAISE THESE FUNDS:

THE TOOLS THAT WE MANAGE TO CROSSCHECK:

1. THE ACCOUNT FIGURES

Accounts payable for goods 132k€ Impairment of constructions 6k€

Cuentas a pagar por bienes 132k€ Deterioro de las construcciones 6k€

MOVING 2. taxes payments

2. Types of cash flows:

1. ASSETS DURATION Ξ LIABILITIES DURATION

Analyse whether it maintains a balance between its

LIQUIDITY: short-term money SOLVENCY: meeting debts

CURRENT RATIO = CURRENT ASSETS/CURRENT LIABILITIES =

DEBT-TO-CAPITAL = TOTAL DEBTS / TOTAL LIABILITIES =

NON current Permanent

MINIMUM FINANCIAL EQUILIBRIUM GENERAL LAW

Liability enforceability similar to investment liquidity

NON current Permanent

Revolving Funds / Working capital: Permanent capitals financing current assets

1ª) Stable part / Permanent

2ª) Variable part S/T Funds

Unforeseen events in reception,

1 WC = Current assets – Current liabilities

The working capital is interpreted as:

1. Represents the portion of Current Assets financed through Fixed

The negative point of the working capital:

Higher cost of the L/T debt (interest rate)

ASSETS 31/12/2019 31/12/2018 LIABILITIES 31/12/2019 31/12/2018

NON CURRENT ASSETS 3.600 3.000 SHAREHOLDERS’ EQUITY 6.500 5.400

Stocks 150 300 L/T Debts 2.500 1.500

Cash & banks 3.850 2.300 Creditors 1.500 6.000

1 WC = Current assets – Current liabilities

2 WC = Permanent funds – Non current assets

The internal cycles of the company:

LONG CYCLE Fix Fix structure of

Non current assets

The fixed asset renewal cycle or long-term cycle:

AVERAGE PERIOD OF ECONOMIC MATURITY:

Average period of economic maturity

AVERAGE PERIOD OF FINANCIAL MATURITY:

Part of the operating cycle is financed by payment deferrals granted by suppliers.

M5 = Average subperiod of payment (to suppliers) Financing resource

Average Period of Economic Maturity

Average Period of Financial Maturity

Accounting tool used: BALANCE SHEET

PROFITABILITY: Profits EFFICIENCY: Well

Define the económic equilibrum through the ratios.

u.m. earned by the company for each u.m. sold

Extent to which the asset is used to make sales

• Differentiation strategy If ↑ Margin

FORMULA (where it comes from):

Incomes Sales = q x Price

Fix Cost (FC)

q* Sales (in units)

Define the breakeven point of the company

Buildings 8..000 Earnings retained 15.500