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

Profit maximisation decision criterion, Profit Maximisation Decision Criter...

Profit Maximisation Decision Criterion According to this approach, actions which increase profits must be undertaken and those that decrease profits are to be avoided. In speci

Explain systematic risks in financial management, Q. Explain Systematic Ris...

Q. Explain Systematic Risks in Financial management? Systematic risk in non-diversifiable and is associated with the securities Market as well as economic, sociological, politi

What are the benefits of collecting early and how it attempt, What are the ...

What are the benefits of "collecting early" and how do companies attempt to do this? A fund has time value.The sooner money is collected the better.  Companies utilize regional

Financial management and materials department, Financial Management and Mat...

Financial Management and Materials Department The materials management is of utmost importance in a manufacturing firm and covers the areas such as procurement, storage, mainte

Volume of issues of central and state government securities, Volume of Issu...

Volume of Issues of Central and State Government Securities The growth of government securities market in India and the investor response to the government bond issues can be k

Explain what happen when government imposes a minimum price, Explain what w...

Explain what will happen while the government imposes a minimum price that is below the market equilibrium price. Why is this true? The minimum price will comprise no impact on t

Calculate the total present value of the tax shield, Nortel is considering ...

Nortel is considering the purchase of a new  call routing system.  The system will cost $50M to purchase, an additional $7M to install, and will last for 30 years.  The CCA rate as

Quantitative or mixed-methods study, Application: Critiquing a Qualitative,...

Application: Critiquing a Qualitative, Quantitative, or Mixed-Methods Study Over the last several weeks you have explored many qualitative, quantitative, and mixed-methods rese

20x6 the balances in the several accounts , At the end of March, 20X6 the ...

At the end of March, 20X6 the balances in the several accounts of Nitin & Company are as follows:

Theoretical spot rates, The theoretical spot rates for treasury secur...

The theoretical spot rates for treasury securities represent the appropriate set of interest rates that should be used to value the risk from default-free cash fl

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