Explain how different amounts of current assets and current liabilities affect firms profitability. How is the cash conversion cycle is determined, how is the cash budget constructed, and how each is used in working capital management. Explain how companies decide on the proper amount of each current assetcash, marketable securities, accounts receivable, and inventory. How do companies set their credit policies, and explain the effect of credit policy on sales and profits. Describe how the costs of trade credit and bank loans are determined.