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What may be the appropriate level of working capital for one company may not hold true for another?
Growth is one factor. More working capital wiill be required at higher growth rates due to the need to buy inventory and hold receivables in a higher growth situation.
Predictability is another factor. If sales and other factors can be precisely estimated then no safety stock woul be required.
Payment speed is another. If customers pay upon purchase or charge using cards then there will be little or no need to tie up capital in Accounts Receivable.
What else can I help you with?
Difference between working capital and working capital margin?
Working capital is a company's short term financial well being and efficiency. Working capital margin is a sum of the company's gross working assets over the long term.
What is the advantage of maintaining an adequate working capital in a small business?
The advantage of maintaining an appropriate amount of working capital is the ability to take advantage of opportunities that exist. If the company doesn't have this money, then the competition may take advantage and gain more market share.
Why do firms need to invest in net working capital?
there is a need to invest in net working capital because net workin capital represents the surplus working capital left with the company after payment of current liablities, hence more net working capital means company has surplus money for its day to day operations
Which company have negative working capital?
Banks for example
Describe and explain the concept of working capital management and why it is important to an organization?
Working capital is the money available to the company to carry out its day to day operations. Managing this capital is important to every company because important functions of the company may be compromised if capital is not managed properly.
How do you determine the amount of working capital a company should have on hand?
You can determine the amount of working capital a company should have on hand at www.googobits.com. Another good website is www.work.com/calculating-your-working-capital-needs-521/
How to asses Req of working capital in IT Company?
"How to asses Req of working capital in IT Company?" "How to asses Req of working capital in IT Company?"
Difference between working capital and working capital margin?
Working capital is a company's short term financial well being and efficiency. Working capital margin is a sum of the company's gross working assets over the long term.
Example of working capital?
Working capital is a measure of a company's efficiency and its financial health. A measure of a companies efficiency is an example of working capital.
What is meant by core working capital?
IT IS THE PERMANENT WORKING CAPITAL. A COMPONENT OF WORKING CAPITAL. ALWAYS REMAINS INVESTED IN BUSINESS AND NEVER ALLOWED TO EXIT. Core working capital is a way how a company is performing in financial terms. It measures the short-term financial health of a company.
What is the advantage of maintaining an adequate working capital in a small business?
The advantage of maintaining an appropriate amount of working capital is the ability to take advantage of opportunities that exist. If the company doesn't have this money, then the competition may take advantage and gain more market share.
What is the importance of working capital?
Working capital is very important concept in finance. Working capital represents the funds available with the company for day to day operations. working capital finances the cash conversion cycle. company cannot survive with negative working capital which represents that the company has no funds for day to day operations Essentially working capital is the answer to the question: "How much short term funding do you need to operate this business?". Short term funding is important because, with long term funding already in place, the business still needs short term funding to operate. Without the short term funding, the business will go bankrupt. Another concept is net working capital which means surpuls of current assets over current liablities. a positive NWC is good for a company
Why do firms need to invest in net working capital?
there is a need to invest in net working capital because net workin capital represents the surplus working capital left with the company after payment of current liablities, hence more net working capital means company has surplus money for its day to day operations
What is schedule of changes in working capital?
Working Capital is a measure of a company's short term liquidity or its ability to cover short term liabilities. Working capital is defined as the difference between a company's current assets and current liabilities.
Which company have negative working capital?
Banks for example
What is the difference between share capital and working capital?
Share capital is equity in the company. It is money raised by the company in exchange for issuing ownership of shares. Working capital is the money that is borrowed from a bank for a business to pay operating expenses.
What is difference between gross working capital and net working capital?
Gross working capital is the amount company invested in current assets while net working capital is the difference between current assets and current liabilities.
