Financial and Asset Management

Running head: FINANCIAL AND ASSET MANAGEMENT
Financial and asset management
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Table of Contents

1FINANCIAL AND ASSET MANAGEMENT
Answer 2..........................................................................................................................................2
a. The impiortance of positive cash flow in the construction business........................................2
Liquidity ratio and the construction company.................................................................................3
b. Valuation Schedule of M&E contract......................................................................................3
Saw Tooth diagram showing positive and negative cash flow........................................................4
Answer 4..........................................................................................................................................6
a. Why the depreciation is important...........................................................................................6
Benifits.............................................................................................................................................6
b. Why the Asset management plan is important.........................................................................6
Reference.........................................................................................................................................8

2FINANCIAL AND ASSET MANAGEMENT
Answer 2
a. The impiortance of positive cash flow in the construction business
The importance of steady fund income or in other way called as positive cash is very
essential in the construction projects. A positive cash fund helps to procure the day to day
business operating activities, material, salaries payment, funding in fresh projects and to finance
into other purposes of the other concerns.
Often the company itself slightly profitable, but not having of ample positive cash flow,
concerned scheme will fall because of the absence of consistent positive funds over the lifespan
of that particular venture. A constructor must assure that a schedule of payment is approved with
the proprietor for reliable cash flow predictions (Mohagheghi, Mousavi and Vahdani 2017).
There are basically two reasons to have positive cash flow in the construction business, first
it will help to to forecast the cash shortfalls and surplus in the near months so accordingly the
company can make a strategic movement.
Second reson is to create a cash flow projection which allows to estimate the effects of
business in the manner of changing events.
Liquidity ratio and the construction company
The liquidity ratio (Hiran 2016) indicates the current cash position within the company,
generally it determines the the ability to pay off the short term obligations by utilizing the
available assets. In most of the cases the construction company holds low liquidity ratio because
the such company does not hold short term asseets or current assets (Yahaya et al 2015) in