Explain about net working capital concept, Financial Management

Assignment Help:

Q. Explain about Net Working Capital Concept?

Net Working Capital Concept: - Net working capital demotes to the difference among current assets and current liabilities. Current liabilities are those maintains of outsiders who are expected to mature for payment within an accounting year and include bills payables, creditors and outstanding expenses. Net working capital is able to be positive or negative.

A positive net working capital will happen when current assets exceed current liabilities. A negative Net working capital takes places when current liabilities are in excess of current assets.

Net Working Capital = Current Assets - Current Liabilities

According to Lawrence. J. Gitmen: - 'The most general definition of net working capital is the difference of firm's current assets as well as current liabilities'.


Related Discussions:- Explain about net working capital concept

What could be your priority in baba''s case, QUESTION (a) A financial f...

QUESTION (a) A financial fraud has happened in BABA Bank. Your services have been retained as forensic examiner to investigate the above case While investigating you receive

Problems in computations of cost of retaining earning, Q. Problems in compu...

Q. Problems in computations of cost of retaining earning? Problems in computations of cost of retaining earning: it is sometimes argued that retained earning do not involve any

What are the factors of debt securities, What are the factors of debt secur...

What are the factors of debt securities A legal agreement, known as a trust deed, is drawn between security holders and company issuing the debt securities. Every security issu

Principle of opportunity cost, Suppose you have recently been contracted as...

Suppose you have recently been contracted as a financial consultant to a London-based engineering company, Alpha Products Plc. The company uses three components as part of their pr

What do you signify by cost of capital, Q. What do you signify by Cost of C...

Q. What do you signify by Cost of Capital? What do you signify by 'Cost of Capital'? What is its meaning and what are the problems in determination of cost of capital? Ans.

Explain the term- maturities, Explain the term- Maturities Debentures a...

Explain the term- Maturities Debentures are sometimes grouped by length of time till maturity that existed on the date debenture was first issued.  Money Market Securities matu

What are the benefits of the jit inventory control system, What are the ben...

What are the benefits of the JIT inventory control system? The just-in-time (JIT) inventory control system lesser inventory carrying costs and tends to increase quality.

Factoring, Factoring Denotes of enhancing a business's cash flow whereb...

Factoring Denotes of enhancing a business's cash flow whereby outside organizations pays a firm a certain portion of its trade debts and then gets the full amount of cash from

Benefit and drawback of maintaining many manufacturing sites, Discuss the b...

Discuss the benefits and drawbacks of maintaining multiple manufacturing sites like a hedge against exchange rate exposure. Answer:  To set up multiple manufacturing sites can

Determining the value at a node or backward induction, The value of node is...

The value of node is determined using a methodology called backward induction. The value at any node depends on the future cash flows; therefore, we need to start from

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd