Describe working capital decision, Financial Management

Assignment Help:

Q. Describe Working Capital Decision?

Working Capital Decision: - It is anxious with the management of current assets. It is a significant function of financial management. Current assets must be managed in such a way that the investment in current assets is neither insufficient nor unnecessary funds are locked up in current assets.

If a firm doesn't have adequate working capital that is its investment in current assets is inadequate it may turn into illiquid and as a result mayn't be able to meet its current obligations.
In contrast if the investment in current assets is too large the profitability of the firm will be adversely affected for the reason that idle current assets will not earn anything.

Related Discussions:- Describe working capital decision

Operating cycle, applicability of an operating cycle in a vegetable growing...

applicability of an operating cycle in a vegetable growing business

Seling price, fixation of selling price

fixation of selling price

Describe career opportunities in the field of finance, List and describe th...

List and describe the three career opportunities in the field of finance? Finance has three key career paths: financial markets and institutions, financial management and inves

Equity share valuation.., Mount Hutt Ltd. just paid dividend of $2.20 per s...

Mount Hutt Ltd. just paid dividend of $2.20 per share. The dividends are expected to grow at a constant rate of 4% per year, indefinitely. If investors require an 11% return on Mou

Budget classification on the basis of functions, ON THE BASIS OF FUNCTIONS ...

ON THE BASIS OF FUNCTIONS •Functional / Subsidiary budgets: A subsidiary budget is a budget of income or expenditure appropriate to or the responsibility of functions, like

Operating cycle., operating cycle in vegetable growing business in uganda.....

operating cycle in vegetable growing business in uganda..

Define how fx futures market be used for price discovery, How can the FX fu...

How can the FX futures market be used for price discovery? Answer: To the amount that FX forward prices are an unbiased predictor of future spot exchange rates, the market antic

International bonds, International bonds are divided into two c...

International bonds are divided into two categories namely, foreign bonds and euro bonds. Foreign bonds are issued by a borrowing company in another

What is compound interest, What is compound interest? Compare compound inte...

What is compound interest? Compare compound interest to discounting. Compound interest takes place when interest is earned on interest and on the original principal of an inves

NET INCOME APPROACH.., You are required to compute the value of both the fi...

You are required to compute the value of both the firms using Net Income approach.

Write Your Message!

Name

Email id

Message

Verfication Code

User Account

All Pages