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CHAPTER-I INTRODUCTION 1. 1 Back ground of Study Working Capital refers to that part of the firm’s capital, which is required for financing short-term or current assets such a cash marketable securities, debtors and inventories. Funds thus, invested in current assets keep revolving fast and are constantly converted into cash and this cash flow out again in exchange for other current assets. Working Capital is […]
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Introduction What is working capital? Working capital represents a net investment in short-term assets. These assets are continually flowing into and out the business and are essential for day-to-day operations. The various elements of working capital are interrelated and can be seen as part of a short-term cycle (McLaney and Atrill, 2010) To put this another way, working capital is to a company what water […]
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WORKING CAPITAL Q1. Which of the following is the primary most objective of working capital? (MCQ)The difference between current assets & current liabilitiesA balance of having liquid assets to ensure the operation is unaffectedManagement of individual working capital componentsWorking capital analysis using ratios(2 marks) Q2. Calculate the Current Ratio & Quick Ratio using the below information. (MCQ)$000Inventory 200Receivables 670Payables 235Bank loan 85Current Ratio 0.37, Quick […]
Management Of Working Capital Introduction Working Capital-Definition Working Capital is the cash needed to pay for the day to day operation of the business. Along with long term investments , business also needs funds for short-term purposes to finance current operations. Investment in short term assets like cash, inventories, debtors etc. , is called ‘Short-term Funds’ or ‘Working Capital’. Hence, the management of Working Capital […]