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

Compounding or future value concept, Compounding or Future Value Concept: -...

Compounding or Future Value Concept: - Under this process of compounding the future worth of all cash inflows at the end of the time horizon at a particular rate of interest are fo

Valuation using treasury spot rates, To understand how treasury spot ...

To understand how treasury spot rates are used to calculate the arbitrage-free value of the treasury security, we will take imaginary treasury spot rates (given i

Describe the techniques of gantt charts, Due to the complexity of the tasks...

Due to the complexity of the tasks involved in many projects, communication of responsibility for those tasks is often helped by means of graphical planning techniques.

Inventory is sometimes thought of as a necessary evil, Inventory is sometim...

Inventory is sometimes thought of as a necessary evil.  Explain. Inventory ties up funds and these funds aren't earning an unambiguous return.  Some inventory is habitually nec

Leverage, evaluate the importance of leverage in financial management of a ...

evaluate the importance of leverage in financial management of a small scale company

Management of working capital, Q. Management of Working Capital? Workin...

Q. Management of Working Capital? Working capital, in general practice, refers to the excess of current assets over current liabilities. Management of working capital therefore

Constructing index numbers - weighted aggregates index, Weighted Aggregates...

Weighted Aggregates Index   In a weighted aggregates index, weights are assigned according to their significance and consequently the weighted index improves the accuracy of the

Historical inflation and stock value experience, Historical Inflation and S...

Historical Inflation and Stock Value Experience The experimental evidence denies the status of stocks as a good hedge against inflation. A study conducted by Ibbotson and Brins

Types of investment decisions, Q. Types of investment decisions? (1) Sh...

Q. Types of investment decisions? (1) Short-term investment decisions: - This kind of investment decisions related to the short-term assets. These decisions are as well called

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