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

Working capital as a percentage of net sales, Q. Working Capital as a Perce...

Q. Working Capital as a Percentage of Net Sales? This approach to estimate the working capital requirement is based on the fact that the working capital for any firm is directl

Define differences between foreign bonds and eurobonds, Describe the differ...

Describe the differences between foreign bonds and Eurobonds. Also discuss why Eurobonds make up the lions share of the international bond market. Answer: The two segments of t

Secured versus unsecured bonds, Along the dimension of security, bond...

Along the dimension of security, bonds can be classified into unsecured (straight) bonds and secured (mortgage) bonds. Unsecured bonds have no charge on any speci

Calculate the annual interest , Reston, Inc., has asked your corporation, P...

Reston, Inc., has asked your corporation, Pruro, Inc., for financial assistance. As a long-time customer of Reston, your firm has decided to give that assistance. The question you

What are the types of major types of finance companies, What are the types ...

What are the types of major types of finance companies? There are three main types of finance companies: a. Sales finance institutions which make loans to customers of a cer

Healthcare Finance, I am trying to make a payment and I can''t seem to get ...

I am trying to make a payment and I can''t seem to get it to go throught on you all site..

Financial statements for a company, The following is incomplete financial s...

The following is incomplete financial statements for XYZ, Inc.: XYZ, Inc.

Determining the call option value, The effective maturity of a ...

The effective maturity of a callable bond can be anywhere between the first call date and its maturity date due to the presence of the call feat

Show limitations of profit maximization, Q. Show Limitations of Profit maxi...

Q. Show Limitations of Profit maximization? The Profit maximization criterion is criticized on the following grounds: i) Quality of Benefits: Profit maximization approach ig

Active management in practice, Constant Duration To ...

Constant Duration To improve a buy and hold strategy a constant average duration is imposed for the managed portfolio during the full interest rate cy

Write Your Message!

Name

Email id

Message

Verfication Code

User Account

All Pages