This exercise is designed to help you understand a companys working capital management practices such as cash and receivables management. This project is composed of two parts. Please submit one Word document with clear and detailed answers to the questions listed below.

Please refer to Chapter 21 on Working Capital Management or other materials to answer the following questions

1. Define each of the following terms: Working capital; net working capital; net operating working capital.

2. What is the difference between permanent operating current assets and temporary operating current assets?

3. What is a maturity matching approach? What is an aggressive approach and a conservative approach?

4. What is a cash budget?

5. What are the two principal reasons for holding cash? Can a firm estimate its target cash balance by summing the cash held to satisfy each of the two reasons?

6. What are the four elements of a firms credit policy? To what extent can firms set their own credit policies as opposed to accepting policies that are dictated by its competitors?

7. Define accruals and trade credit.

8. Describe cash management techniques. What is the primary goal of cash management?

9. Describe transaction balance, precautionary balance, and compensating balance.

10. What are the advantages of matching the maturities of assets and liabilities? What are the disadvantages?

11. From the standpoint of the borrower, is long-term or short-term credit riskier? Explain. Would it ever make sense to borrow on a short-term basis if short-term rates were above long-term rates?

12. Discuss this statement: Firms can control their accruals within fairly wide limits.

Please read and answer the following questions:

1. What is the level of total cash (including cash equivalents) for Google (GOOGL) and Apple (AAPL)? You can find the answers from Yahoo.Finance Financials Balance Sheet.

2. What do you think of the size of the cash balance? Why do you think the firm has this level of cash?

3. Based on your knowledge on cash management, please provide comments or analysis on Google/Apple/s cash balance.