BALIUAG UNIVERSITY

College of Business Administration and Accountancy

Financial Management
Luisito V. Correa Jr. CPA, CAT, MBA
Module 4: Working Capital Management LVC

I. Working Capital
✓ Definition
Working Capital Management – refers to the administration and control of current assets and current
liabilities to maximize the firm’s value by achieving a balance between profitability and risk
Working Capital – technically, it pertains to current assets. Although in some literature it refers to current
assets net of current liabilities.
Net working capital – pertains to current assets minus of current liabilities.

✓ Working capital financing policies

1. Matching Policy (also called self-liquidating policy or hedging policy) – matching the maturity of a financing
source with an asset’s useful life
2. Conservative (Relaxed) Policy – operations are conducted with too much working capital; involves financing
almost all asset investments with long-term capital
3. Aggressive (Restricted) Policy – operations are conducted on a minimum amount of working capital; uses
short-term liabilities to finance, not only temporary, but also part or all of the permanent current asset
requirement

✓ Ways of minimizing working capital requirement

1. Managing cash and raw materials efficiently.
2. Having efficiency in making collections and in the manufacturing operations.
3. Implementing effective credit and collection policies.
4. Reducing the time lag between completion and delivery of finished goods.
5. Seeking favorable terms from suppliers and other creditors.

II. Cash Management

✓ Cash management – involves the maintenance of the appropriate level of cash and investment in marketable
securities to meet the firm’s cash requirements and to maximize income on idle funds.

✓ Reasons for holding cash

1. Transaction Purposes – firms maintain cash balances that they can use to conduct the ordinary business
transactions; cash balances are needed to meet cash outflow requirements for operational or financial
obligations.
2. Compensating Balance Requirements – a certain amount of cash that a firm must leave in its checking
account at all times as part of a loan agreement. These balances give banks additional compensation
because they can be relent or used to satisfy reserve requirements.
3. Precautionary Reserves – firms hold cash balance in order to handle unexpected problems or
contingencies due to the uncertain pattern of cash inflows and outflows.
4. Potential Investment Opportunities – excess cash reserved are allowed to build up in anticipation of a
future investment opportunity such as a major capital expenditure project.
5. Speculation – firms delay purchases and store up cash for use later to take advantage of possible changes
in prices of materials, equipment, and securities, as well as changes in currency exchange rates

✓ Concept of float
• Float – the difference between the bank’s balance for a firm’s account and the balance that the firm shows
on its own books due to timing.
– time between when one party mails a payment and the other party has the funds available for use.
• Effective cash management involves extending the float for disbursements and shortening the float for
cash receipts.
➢ Types of float as to disbursement or collection
a. Disbursement float –is generated when a firm writes a check, causing a decrease in the firm’s book
balance but to change in its available balance.
Collection float – is created when a firm receives a check, causing an increase in the firm’s book
balance but no change in its available balance.

➢ Types of float as to positive or negative

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b. Positive float – Bank balance is greater than the book balance
c. Negative float – Bank balance is less than the book balance
➢ Types of float as to mailing, processing and clearing
a. Mail Float – peso amount of customers’ payments that have been mailed by a customer but not
yet received by the seller.
b. Processing Float – peso amount of customers’ payments that have been received by the seller but
not yet deposited.
c. Clearing Float - peso amount of customers’ checks that have been deposited but not yet cleared.

• Strategies to reduce collection float

1) Mailing of sales invoices as soon as possible.

2) Cash or sales discount. Giving a discount if the invoice is paid before the due date to encourage prompt
payment of customers.

3) Electronic data interchange (EDI) is the process of computers from two different companies
communicating directly for common transactions. This electronic communication usually takes place
between a supplier and purchaser.

4) Electronic funds transfer (EFT). EFT involves payment made by bank transfer from one company’s
checking account to another company’s checking account. Electronic funds transfer is particularly
useful when the buyer and seller are not geographically close to each other and mailed payments
would require several days to be received.

5) Credit cards. The advantage of credit cards to the merchant is that the funds are immediately available.
The responsibility for collection has been transferred to the credit card issuing bank in exchange for
the fee the issuing bank receives.

6) Lockbox. In a lockbox system, customer payments are sent to a post office box that is maintained by a
bank. Bank personnel retrieve the payments and deposit them into the firm’s bank account. This
technique has the following advantages: (a) Increases the internal control over cash because firm
personnel do not have access to cash receipts. (b) Provides for more timely deposit of receipts which
reduces the need for cash for contingencies. The system is cost effective if the interest costs saved due
to obtaining more timely deposits is sufficient to cover the net increase in costs of cash receipt
processing.
Net benefit/(net cost) = Savings from timely deposit – Net cost of the lockbox
Where:
Savings from timely deposit = Ave. daily collection x No. of float days reduced x Interest rate
Net cost of the lockbox = Bank service charge – Avoidable internal processing cost

PRACTICE PROBLEM. Assume that a firm is evaluating whether to establish a lockbox system. The
following information is available to make the decision: The bank will charge P25,000 per year for the
process and the firm will save approximately P8,000 in internal processing costs. The float for cash
receipts will be reduced by an estimated two days. Therefore, the firm will receive use of the cash
receipts on the average two days earlier. Average daily cash receipts are equal to P300,000 and short-
term interest costs are 4%. Should the firm establish the lockbox system? (Please solve the problem)
a) Savings from timely deposit = ______________________
b) Net cost of the lockbox = ______________________
c) Net benefit or net cost = _______________________
d) Established a lockbox (Yes or No)?

7) Concentration Banking. Using this technique, customers in an area make payments to a local branch
office rather than firm headquarters. The local branch makes deposits in an account at a local bank.
Then, surplus funds are periodically transferred to the firm’s primary bank. Since these offices and
banks are closer to customers, the firm gets the use of the funds more quickly. The float related to

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cash receipts is shortened. However, transferring funds between accounts can be costly. Computation
of net benefit or net cost from concentration banking is similar to that of the lockbox system.

PRACTICE PROBLEM. Assume that a firm is considering establishing a concentration banking system
and has the following information to make the decision: The concentration banking arrangement will
allow access to the firm’s average P100,000 daily cash receipts from customers two days faster. Bank
maintenance and transfer fees are estimated at P4,000 per year. The firm’s short-term borrowing cost
is 3.5%. Should the firm establish the concentration banking system? (Please solve the problem)
a) Savings from timely deposit = ______________________
b) Net cost of the concentration banking = ______________________
c) Net benefit or net cost = _______________________
d) Established a concentration banking system (Yes or No)?

✓ Operating Cycle and Cash Conversion Cycle

• The operating cycle is the number of days inventory is held before it is sold and the number of days
accounts receivable are held before collection. It represents the total number of days the firm has funds
invested in working capital.
• The cash conversion cycle (also called cash flow cycle) is the operating cycle minus the average age of
accounts payable. The cash conversion cycle represents the number of days from the time the firm pays
for the inventory until it receives cash from the sale of the inventory. The cash conversion cycle is one way
of evaluating a company’s cash management. Shortening the cash conversion cycle without affecting sales
can add to the firm’s profitability.
• A company wants to do what it can to decrease its cash conversion cycle. The cash conversion cycle can be
decreased either by collecting its receivables faster or by delaying payment of its payables.

• Pertinent Formulas
Particular Formula
360 days ÷ Inventory turnover
Days to sell inventory/ or
Days sales in inventory/ Average inventory ÷ Cost of goods sold per day
Inventory conversion period or
(Average inventory ÷ Cost of goods sold) x 360 days
360 days ÷ Receivable turnover
Days sales outstanding/ or
Days sales in receivables/ Average accounts receivables ÷ Credit sales per day
Receivables collection period or
(Average accounts receivables ÷ Credit sales) x 360 days
360 days (or 365 days) ÷ payable turnover
Days payable outstanding/ or
Days purchases in payables/ Average accounts payable ÷ Credit purchases per day
Payables deferral period or
(Average accounts payable ÷ Credit purchases) x 360 days
Operating cycle Days to sell inventory + Days sales in receivables
Cash conversion cycle Operating cycle – Days payable outstanding
• PRACTICE PROBLEM. Assume the following information for Hyper Save Gold Market (in Philippine Pesos):
Average inventory 4 million Cost of sales 40 million
Average accounts receivables 5 million Credit sales 60 million
Average accounts payable 2.5 million Credit purchases 30 million
Requirements:
a) Inventory conversion period
b) Receivables collection period
c) Payables deferral period
d) Operating cycle
e) Cash conversion cycle
f) Is the cash conversion cycle favorable or unfavorable?

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✓ Optimal Cash Balance

• William Baumol developed a cash model to determine the optimum amount of transaction cash under
conditions of certainty.
• It is often called the Optimal Cash Balance or Economic Conversion Quantity (Optimal Transaction Size).
• The objective is to minimize the sum of the fixed costs of transactions and the opportunity cost of holding
cash balances.
• Under this model, transaction cost or conversion cost approximates the opportunity costs.

• Baumol’s model of optimal cash balance

𝟐𝐃𝐓
C* = √ 𝐨
𝐢
Where: C* = Optimal cash balance
D = Annual demand for cash
T = Fixed transaction cost or conversion cost (cost of converting marketable securities)
i = Interest rate on marketable securities (opportunity cost of holding cash rather than
investing in marketable securities
Average cash balance = Optimal cash balance ÷ 2
No of conversion (transactions) per year = D ÷ C*
Total opportunity cost = Ave cash balance x i
Total conversion (transaction) cost = No. of conversion x T

• PRACTICE PROBLEM. You estimate a cash need for P4 million over a one-month period where the cash
account is expected to be disbursed at a constant rate. The opportunity interest rate is 6 percent per
annum which is equal to the interest rate on marketable securities. The transaction cost each time you
borrow or withdraw from a money market fund P100.
Requirement
a) Optimal cash balance
b) Average cash balance
c) Number of conversion (transaction)
d) Total opportunity cost
e) Total transaction cost (conversion cost)

III. Marketable Securities Management

✓ Basic concept
• Marketable securities – short-term money market instruments that can easily be converted to cash
• Reasons for holding marketable securities:
A. Substitute for cash (transactions, precautionary, and speculative) balances.
B. A temporary investment that yields return while funds are idle.
C. Cash is invested in marketable securities to meet known financial obligations such as tax payments and
loan amortizations.

✓ PRACTICE PROBLEM. Identify the types of marketable securities. Choose from the word box given hereafter.
Type Description
a) Short-term debt securities issued by the government. They do not have
stated interest rate but are sold by the government at a discounted amount
and redeemed at maturity at face or par value.
b) Long-term debt securities issued by the government. Similar to its short-
term counterparts, it is issued by the Philippine Government through the
Bureau of the Treasury.

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Type Description
c) Savings deposits with a bank that may not be withdrawn before their
maturity without a high penalty. Usually have a higher rate of interest
when compared with other savings instruments because they are for fixed,
usually long-term periods.
d) Unsecured short-term debt securities issued to the public by large
creditworthy corporations.
e) Drafts (or checks) drawn on a bank for payment when presented to the
bank. Generally arise from payments for goods by corporations in foreign
countries. Because the bank is writing and guaranteeing the check, the
check carries less risk than a corporate or personal check.
f) Similar to savings accounts, individual or business investors deposit idle
funds in the accounts and the funds are used to invest in higher-yielding
bank certificate of deposits (CDs), commercial papers, etc. They pay
higher interest rates than ordinary savings accounts but less than on
CDs.
g) Shares in a fund that purchases higher-yielding bank CDs, commercial
paper, and other large-denomination, higher-yielding securities. Each
investor owns a portion of the mutual fund. These allow many more
investors access to more of the money market instruments.
h) Sales of governmental securities by a dealer who also has agreed to
repurchase them at a specific time in the future at a specific price.

Word Bank
Banker acceptance Money market mutual funds
Certificate of deposits Mortgage-backed securities
Commercial papers Repurchase agreements
Corporate bonds Treasury bills
Money market accounts Treasury notes

✓ Effective yield of treasury bills (T-bills)

Discount = Face value of the T-Bill – Price of the T-Bill or the discounted amount
= represents the interest earned on a T-bill
Effective interest rate = Discount_ x 360 days____
T-bill price Days to maturity

✓ PRACTICE PROBLEM. Assume a 90-day T-bill with a face value of P10,000. The bill is sold at a discount for
P9,800. During the 90 days that the T-bill is outstanding. After 90 days the buyer will receive P10,000.
Compute the effective interest rate of the T-bill.
a) Discount =
b) Effective rate =

IV. Receivables Management

✓ Receivables management involves the formulation and administration of plans and policies related to sales on
account and ensuring the maintenance of receivables at a predetermined level and their collectability as
planned.

✓ Ways to accelerate collection of receivables

1. Shorten credit terms.
2. Offer special discounts to customers who pay their accounts within a specified period.
3. Speed up the mailing time of payments from customers to the firm.
4. Minimize float, that is, reduce the time during which payments received by the firm remain uncollected
funds.

✓ Tools to analyze receivables

a. Ratio of receivables to net credit sales

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b. Receivable turnover (Refer financial ratios for formula)
c. Average collection period/Days sales outstanding (Refer to conversion cycle for formula)
d. Aging of accounts

✓ Three elements that make up the credit policy

1. Credit standards determine to whom the company grants credit. Relaxed terms mean that the company
gives credit to more customers, and strict terms means that the company gives credit to only those with a
very low risk of default.
2. Credit terms include the terms of sale, including the payment period, discount for early payment or penalty
for late payment, and the size of the discount or penalty.
3. Collection efforts are the amount of time and money spent on trying to collect past due accounts before
writing them off as bad debts.
• Any action that changes any of these elements will have both costs and benefits. The benefits may be in
the form of increased sales revenues (as would result from the relaxation of credit standards), the
reduction of opportunity costs due to lower accounts receivable balances, fewer bad debts or lower
collection expenses. The costs may include lost sales revenue (from tighter credit standards), increased
discounts taken (a cost of collecting the receivables sooner), the opportunity cost of higher accounts
receivable balances, higher bad debts, or higher collection expenses.
• Credit scoring issued by companies to manage their credit policies and extend credit only to creditworthy
customers. In a credit scoring system, a potential customer is graded against specific criteria and they get
points for meeting certain criteria. The “score” that a potential customer receives then determines
whether or not it will receive credit.

V. Inventory Management
✓ Inventory management formulation and administration of plans and policies to efficiently and satisfactorily
meet production and merchandising requirements and minimize costs relative to inventories.

✓ Inventory management ratios

a. Inventory turnover calculates how many times during the year the company sells its average level of
inventory.
b. Days Sales in Inventory represents the number of days the average inventory item remains in stock
before it is sold.
c. Gross margin represents the mark up on inventory
✓ Inventory models
• Inventory models – Techniques that helps a firm in determining the economic order quantity, and the
frequency of ordering, to keep goods or services flowing to the customer without interruption or delay.
• Inventory model tools:
1) Economic Order Quantity (EOQ) – Answers the question: How many units should be ordered?
– Optimal order size that minimizes the total inventory costs.
– In EOQ total carrying cost approximates total ordering costs.
o Components of inventory costs
Particular Carrying Costs [CC] Ordering Costs [OC]
Definition Holding costs of inventories Costs of placing an order to supplier

Examples Storage, insurance, normal Delivery, inspection, purchasing,

spoilage, record keeping, utilities receiving, quantity discount lost,
in warehousing handling cost.
Effect of order size Increase Decrease
and quantity on hand
Formula Total CC = Ave. Inventory x C Total OC = No. of orders per year x O
Where: Where:
C = Carrying cost per unit O = Cost per order
Ave. inventory = (EOQ ÷ 2) + No. of orders per year = (D ÷ EOQ)
safety stocks (if any) D = Annual demand in units

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o Formula for EOQ

𝟐𝐃𝐎
EOQ = √ 𝐨
𝐂
Where:
D = Annual demand in units of inventory
O = Fixed cost per order
C = Carrying cost per unit

o Illustration. Assume that Medina Co. makes footballs and is trying to determine the quantity of
leather it should order every time an order is placed. The relevant information is as follows:
- Over the course of a year 12,000 square meters of leather will be needed,
- Cost of carrying and storing is P3 per square meter of leather and
- Cost of placing an order is P450 per order.

2) Reorder Point (ROP) – Answers the question: When should the units be ordered?
– Level of inventory which triggers an action to replenish that inventory stock.
– It is a minimum amount of an item which a firm holds in stock.
– When stock falls to this amount, the item must be reordered.
Lead time – Period of time from placing an order up to the time of receiving the order.
• Formulas for reorder point
ROP = Normal lead time usage + safety stocks (if any)
Normal lead time usage = Normal lead time x average daily usage
Safety stocks = (maximum lead time – normal lead time) x average daily usage
• Illustration. Assume that the average lead time is 10 days and the average daily usage of widgets
is 20. The company has determined that safety stock should be 100 units. The reorder point will
be when inventory on hand gets down to 300 units, as follows:

✓ PRACTICE PROBLEM.
1) XYZ Co. requires 54,000 units of material Z for its annual production of its signature product. The
cost to place an order of the material Z is P50 per order and the holding cost to carry material Z in
inventory is P0.50 per unit. Determine the following:
a) How many units should XYZ place each time it makes an order of material Z? (EOQ)
b) No. of times XYZ Co. will place an order for material Z per year
c) Average inventory
d) Total ordering cost
e) Total carrying cost

2) A company needs 72,000 units of raw materials for one year. The raw materials is used evenly
throughout the year. The average purchase lead time of a firm is 7 working days. Maximum lead time
is 10 working days. Use 360 days calendar year. Determine the following:
a) Normal lead time usage
b) Safety stocks
c) What level of raw materials would necessitate ordering from the vendor to prevent stock outs?
(Reorder point)

✓ Inventory management systems.

PRACTICE PROBLEM. Identify the following inventory management systems. Choose from the word box below.

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Inventory System Description
a) A “demand pull” system in which each component of a finished good is
produced when needed by the next production stage. Timing the purchase
of raw materials (or finished goods, for a reseller) so that the items ordered
will be delivered just as needed. Cost accounting system employed by JIT
system is called backflush costing. The primary benefit of JIT is reduction of
inventories, ideally to zero.
b) Computerized system that manufactures finished goods based on demand
forecasts. A master production schedule is developed that specifies the
quantity and timing of production of goods, taking into account the lead
time required to purchase materials and to manufacture the various
components of finished products.
c) Developed as an extension of MRP and it features an automated closed loop
system. That is, production planning drives the master schedule which
drives the materials plans which is input to the capacity plan. It uses
technology to integrate the functional areas of a manufacturing company.
d) An operational strategy focused on achieving the shortest possible cycle
time by eliminating waste.
e) Tracks the accumulation of costs that occur starting with the research and
development for a product and ending with the time at which sales and
customer support are withdrawn
f) The use of computers to plan, implement and control production.
g) A highly automated and integrated production process that is controlled by
computers.
h) A series of computer-controlled manufacturing processes that can be easily
changed to make a variety of products.
i) Enterprise-wide computerized information systems that integrate all
functional areas within an organization. By sharing information from a
common database, marketing, purchasing, production, distribution, and
customer relations management can be effectively coordinated.

Word Bank
Computer-Aided Manufacturing (CAM) Lean manufacturing
Computer-Integrated Manufacturing (CIM) Materials Requirements Planning (MRP)
Enterprise Resource Planning (ERP) System Materials Requirements Planning II (MRP II)
Flexible manufacturing system (FMS) Product life cycle costing
Just-in-time system (JIT)

VI. Short-term Financing Management

✓ Short-term financing
- Focuses on the current liabilities portion of the company’s balance sheet and on the way changes in current
liabilities affect a company’s net working capital.

✓ Sources of short-term financing

A. Trade Credit – accounts payable from purchase of goods and services on account

B. Short-term bank loan – short-term notes payable to banks.

a) Informal line of credit—An informal specification of the maximum amount that the bank will lend the
borrower.
b) Revolving credit agreements—A line of credit in which the bank is formally committed to lend the firm
a specified maximum amount. The bank typically receives a commitment fee as a part of the
agreement. Revolving credit arrangements are often used for intermediate-term financing.
c) Letter of credit—An instrument that facilitates international trade. A letter of credit, issued by the
importer’s bank, promises that the bank will pay for the imported merchandise when it is delivered.

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C. Commercial paper – A form of unsecured promissory note issued by large, creditworthy firms. It is sold
primarily to other firms, insurance companies, pension funds, banks, and mutual funds. Commercial paper
typically has maturity dates that vary from one day to nine months.

D. Accounts receivable financing

a) Pledging of receivables – Pledging accounts receivable involves committing the receivables as
collateral for a loan from a financial institution.
b) Assignment of accounts receivable – A lending agreement whereby the borrower assigns accounts
receivable to the lending institution. In exchange for this assignment of accounts receivable, the
borrower receives a loan for a percentage of the accounts receivable.
c) Factoring – When accounts receivable are factored, they are sold outright to a finance company. In
such situations, the finance company is often directly involved in the credit decisions, and will submit
the funds to the firm upon acceptance of the account.
d) Asset-backed public offerings – Large firms recently have begun floating public offerings of debt (e.g.
bonds) collateralized by the firm’s accounts receivables. Because they are collateralized, such
securities generally carry a high credit rating, even though the issuing firm may have a lower credit
rating.

E. Inventory financing
a) Blanket Inventory Lien – This is simply a legal document that establishes the inventory as collateral for
the loan. No physical control over inventory is involved.
b) Trust Receipt – An instrument that acknowledges that the borrower holds the inventory and that
proceeds from sale will be put in trust for the lender. Each item is tagged and controlled by serial
number. When the inventory is sold, the funds are transferred to the lender and the trust receipt is
cancelled. This form of financing is also referred to as floor planning and is widely used for automobile
and industrial equipment dealers.
c) Warehousing – This is the most secure form of inventory financing. The inventory is stored in a public
warehouse or under the control of public warehouse personnel. The goods can only be removed with
the lender’s permission.

✓ Effective interest of short term financing

1) Trade credits – Firms generally purchase goods and services from other firms on account. Trade credit,
especially for small firms, is a very significant source of short-term funds. This is commonly recorded as
accounts payable.
– Many firms have credit terms that allow a cash discount for early payment of the invoice.
For example, a firm might sell on terms of 2/10, net 30, which means that payment is due in thirty days
and a 2% discount is allowed for payment within 10 days. Generally, it is a good financial decision to take
advantage of such discounts because the rate of interest realized for early payment is significant.
– Many firms have credit terms that allow a cash discount for early payment of the invoice.
• Cost of giving up cash discount is calculated as follows:
Effective rate (cost of cash discount) = Discount rate__ x 360 days__________
100% – Discount rate Credit period – Discount period
2) Bank Loans
a. Single-payment notes – If the interest is payable upon maturity, the effective interest rate is equal to
the nominal rate.
b. Discounted Notes – The effective interest rate is higher than the nominal rate.
Effective rate = Interest expense or discount x 360 days
Face value – Discount Maturity
c. Loans with restricted compensating balance – If a loan has a compensating balance requirement, the
borrower is required to keep some minimum balance in an account with the bank.
Effective rate = Interest expense on loan – Interest income on compensating balance x 360 days
Face value of loan – Compensating balance Maturity
*Notes: For the time period you may use the days or months (360/No. of days) or (12/No. of months)
If the bank charges service fee or finance cost, the finance cost shall be added to the interest
expense or discount of the loan.

• PRACTICE PROBLEM.
a) The Chesken Corporation needs to raise P1,000,000 for 1 year to supply working capital to a new
store. Chesken buys from its suppliers on terms of 3/10, net 60, and it currently pays on the 10th
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day and takes discounts. However, it could forgo the discounts, pay on the 60th day. What is the
nominal cost of foregoing the discount?

b) A P10,000 bank loan with 8% discounted interest, principal and interest due in one year. The
interest will be deducted from the principal and when the loan matures in one year, the borrower
repays P10,000 total loan. What is the effective rate of the bank loan?

c) A P60,000 bank loan charges 12% interest plus bank service fee equals to 1% of the loan. The loan
in payable in nine months and require a compensating balance equal to 10% of the loan. Interest
on saving of 1% will be applied on the restricted compensating balance. What is the effective rate
of the bank loan?

References
CPA Review School of the Philippines. (n.d.). Management Advisory Services: Working Capital Management and
Financial Statement Analysis.

Hock, B., & Roden, L. (2014). CMA Preparatory Program Part 2 Volume 1: Financial Decision Making (6th ed.). Hock
International, LLC.

Oneclass.com. (n.d.).

Virginia.edu. (n.d.) Understanding Float. https://collab.its.virginia.edu/access/content/group/dff17973-f012-465d-

9e73-a05fa4456644/Research/Fundamentals/Float.pdf

Whittington, R. O. (2013). CPA Exam Review: Business Environment and Concepts. John Wiley& Sons, Inc.

- End of lecture.

“Do not be anxious about anything, but in every situation, by prayer and petition, with thanksgiving, present your
requests to God.” Philippians 4:6

“Pray, hope, and don't worry. Worry is useless. God is merciful and will hear your prayer.” St. Padre Pio

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