• Ross, S. A., Westerfield, R. W., Jaffe, J. F., & Jordan, B. D. (2021). Corporate finance: Core principles and applications (6th ed.). McGraw-Hill.
  • Chapter 18, "Short-Term Finance and Planning," pages 551582. In this chapter, see how short-term financial planning is the essential discipline of finance to ensure that the firm's liquidity is intact and that ongoing operations of the firm are secure.
• Unit 10: Short-Term Cash ManagementLinks to an external site..

Short-term financial planning is the essential discipline of finance to ensure that the firm's liquidity is intact and that ongoing operations of the firm are secure. The examination of concepts like working capital, cash budgets, cash management, and short-term borrowing will show that without prudent attention to this area, financial distress will occur. Firms need to line up their needed capital not when they need it but before they need it. Hence, the planning and control functions that come into play in short-term financial planning are mandatory activities for all businesses, huge or small.

In this discussion, by being exposed to cash management and planning concepts, you will develop a better understanding and appreciation of the importance of this part of the finance discipline to the ongoing solvency of businesses.

Research a new start-up company (in business 12 years) that went bankrupt because they grew too fast. Explain how that can happen as it relates to short-term cash management.