Financial Management Questions Essay Example for Free

Financial Management Questions EssayQuestion 1 Medwig Corporation has a DSO of 17 days. The social club averages $3500 in credit sales each day. What is the companys average accounts receivable? Answer / SolutionAccounts Receivable = Days Sales Outstanding * (Sales / Days) = 17 * (3500/1) = $59,500Question 2Discuss some of the techniques uncommitted to slenderise risk of infection exposures? Answer Insurance is one of the simplest and most available ways to reduce exposure to risk. It involves the transfer of risk to another company. Depending on the amount and nature of the risk tangled, risk retention by self-insurance readiness not be a practical option, especially if the speak to of transferring the risk (insurance premiums) is reasonable enough to not add significant costs. Risk transfer is not through with(p) always through insurance, however.Outsourcing some operations to a company who agrees to take on the risk involved is another type of risk reduction. Some tasks are best suited for specialized companies, and large organizations might outsource such activities as customer support, software development and internal security.Derivative hedging is as well as an option, depending on the nature of the company. Futures contracts, for example, reduce the risk of price fluctuations in a particular commodity, and are truly useful to transfer it to a speculator. A company producing commodities would benefit from this type of hedge. Aside from transferring risks, a company might try to reduce risk by reducing the inherent cause of the risk. Instead of hiring a single custodian for cash transfers, a company might hire another one to reduce the risk of employee theft. The last method is to avoid the risk completely. This will completely circumvent possible losses, nevertheless it also precludes any possible gains from taking on the risk.