Study Guide

Objective

Students are able to define the basic concepts of liquidity management. They can list the stages of the planning and realization of a liquidity management process. They can work out liquidity management calculations and assess their importance in the decision-making process. They know how to use liquidity ratios and interpret them in analyzing a firm's liquidity. They can evaluate the significance of comprehensive effective liquidity management for firms and other organizations.

Content

- concepts and basic issues of liquidity management
- the importance of liquidity management for companies and other organizations
- liquidity management organization and processes
- implementation principles of liquidity management: accounts payable management, credit management, cash management, payment systems, international liquidity management
- providers of liquidity management services
- theme interview of a liquidity management expert

Qualifications

Financial Management Studies 1 - 2

Assessment criteria, satisfactory (1)

The student has completed the assigned tasks/sections. The student can define the basic concepts related to the management of the company's liquidity. She/he can present the planning and implementation of the different phases of the liquidity management process. She/he knows how to use basic calculations related to liquidity management and evaluate their usefulness in decision-making. The student knows how to use indicators of liquidity and their interpretation guidelines in evaluating the company's liquidity situation. The student can evaluate the importance of liquidity management for companies and other organizations.

Assessment criteria, good (3)

The student has completed the assigned tasks/sections well and has actively participated in the course. The student can define the basic concepts related to the management of the company's liquidity. She/he can present the planning and implementation of the different phases of the liquidity management process. She/he knows how to use calculations related to liquidity management in a versatile way and evaluate their usefulness in decision-making. The student knows how to use indicators of liquidity and their interpretation guidelines in evaluating the company's liquidity situation. The student can evaluate the importance of effective liquidity management for companies and other organizations.

Assessment criteria, excellent (5)

The student has completed the assigned tasks/sections commendably and has participated actively and constructively in the course. The student can accurately define the basic concepts related to the management of the company's liquidity. She/he can logically present the planning and implementation of the different phases of the liquidity management process. The student knows how to use calculations related to liquidity management in a versatile and critical way and evaluates their usefulness in decision-making. She/he knows how to critically use indicators of liquidity and their interpretation guidelines in evaluating the company's liquidity situation. The student can comprehensively evaluate the importance of effective liquidity management for companies and other organizations.

Materials

- Maness, T.S. and Zietlow, J.T. 2004. Short-term Financial Management.

- Kytönen, E. 2017. Likviditeettihallinto-osaaminen. Opetusmoniste. (Liquidity management skills. Teaching paper.)

- Kytönen, E. 2010. Strategiset kassahallintopäätökset: pitkittäisanalyysi suomalaisten pörssiyritysten parhaista käytänteistä. (Strategic cash management decisions: a longitudinal analysis on best cash management practices of Finnish listed firms.)
Availability: http://www.seamk.fi/loader.aspx?id=ece77280-ee17-4adf-9ebe-f8af64adbbed

- Websites of liquidity management service firms (links in the Teaching paper)

- material provided by the teacher (in Moodle: https://moodle.epedu.fi/)

Further information

Students are also advised to take a course in financial statement analysis and valuation and in investment and financial planning