Browse CFA Level 1

Chapter 4: Working Capital and Liquidity

Chapter 4: Working Capital and Liquidity (CFA Level 1): Key concepts, definitions, and exam tips with practical examples. Use it to reinforce intuition and avoid common pitfalls.

In this section

  • Cash Conversion Cycle Components and Analysis
    Cash Conversion Cycle Components and Analysis (CFA Level 1): Key Components of the Cash Conversion Cycle, Days Sales Outstanding (DSO), and Days Inventory Outstanding (DIO). Key definitions, formulas, and exam tips.
  • Managing Receivables, Payables, and Inventory
    Managing Receivables, Payables, and Inventory (CFA Level 1): Working Capital Cycle, Receivables Management, and Credit Policies and Terms. Key definitions, formulas, and exam tips.
  • Measuring Liquidity (Ratios and Metrics)
    Measuring Liquidity (Ratios and Metrics) (CFA Level 1): Why Liquidity Matters for Corporate Issuers, Core Liquidity Ratios, and Current Ratio. Key definitions, formulas, and exam tips.
  • Short-Term Funding Strategies and Sources
    Short-Term Funding Strategies and Sources (CFA Level 1): Key Funding Instruments and Strategies, Bank Credit Lines, and Revolving Credit Facilities. Key definitions, formulas, and exam tips.
  • Approaches to Working Capital Policy (Aggressive vs. Conservative)
    Approaches to Working Capital Policy (Aggressive vs. Conservative) (CFA Level 1): Key Concepts and Policy Spectrum, Net Working Capital Formula, and Aggressive Policy. Key definitions, formulas, and exam tips.
  • Short-Term Credit Rating Implications
    Short-Term Credit Rating Implications (CFA Level 1): Understanding Short-Term Credit Ratings, Major Credit Rating Agencies, and Key Determinants of Short-Term Ratings. Key definitions, formulas, and exam tips.
  • Factoring, Asset-Based Lending, and Alternative Financing
    Factoring, Asset-Based Lending, and Alternative Financing (CFA Level 1): Factoring: A Key Tool for Liquidity Management, Factoring Basics, and With Recourse vs. Without Recourse. Key definitions, formulas, and exam tips.
  • Liquidity Stress Testing
    Liquidity Stress Testing (CFA Level 1): Objectives and Key Considerations, Governance and Oversight, and Quantitative vs. Qualitative Approaches. Key definitions, formulas, and exam tips.
  • Supply Chain Financing (Reverse Factoring)
    Supply Chain Financing (Reverse Factoring) (CFA Level 1): Key Concepts and Definitions, Mechanics of Reverse Factoring, and Advantages of Supply Chain Financing. Key definitions, formulas, and exam tips.

Important Notice: FinancialAnalystGuide.com provides supplemental CFA study materials, including mock exams, sample exam questions, and other practice resources to aid your exam preparation. These resources are not affiliated with or endorsed by the CFA Institute. CFA® and Chartered Financial Analyst® are registered trademarks owned exclusively by CFA Institute. Our content is independent, and we do not guarantee exam success. CFA Institute does not endorse, promote, or warrant the accuracy or quality of our products.

Chapter 3: Corporate Governance: Conflicts, Mechanisms, and Risks
Chapter 5: Capital Investments and Capital Allocation