Nature of working capital, Financial Management

Assignment Help:

Nature of Working Capital:

Working Capital Management is concerned with the problems that arise in attempting to organize the Current Assets, the inter-relationship and Current Liabilities that exists between them. The term Current Assets defines to those Assets which in the ordinary course of business can be, or will be, converted into Cash within one year without undergoing a diminution in value and without difficult the operations of the firm. The Major Current Assets are Cash, Accounts Receivables, Marketable Securities and Inventory.

Current Liabilities are those Liabilities, which are proposed at their inception, to be paid in the ordinary course of business, within a year out of the present assets or the earnings of the concern .The basic Current Liabilities are Accounts Payable, Bank Overdraft, Bills Payable, and outstanding expense. The goal of Working Capital Management is to organize the firm's Assets and Liabilities in such a way that a satisfactory level of working capital is sustained. This is so because if the firm will not maintain a satisfactory level of working capital, it is likely to become insolvent and can even be forced into bankruptcy.


Related Discussions:- Nature of working capital

Day count convention, Day count convention is a system used to determ...

Day count convention is a system used to determine the number of days between two coupon dates. It is important in calculating accrued interest and present value

Define a convertible bond, Define a Convertible Bond A convertible bond...

Define a Convertible Bond A convertible bond issue permits the investor to exchange the bond for a pre-defined number of equity shares of the issuer.  The convertible bond’s fl

Specifications for contracts, S pecifications Following are the variou...

S pecifications Following are the various specifications that we need to apply while creating contracts. If the goods to be procured are covered under Bureau of Indian

Advantages of private mutual funds, Advantages of Private Mutual Funds ...

Advantages of Private Mutual Funds It is felt that the entry of private Mutual Funds would encourage competitiveness in the financial sector and promote the existing investment

Relation between Inflation and FX, If the 180-day forward rate for the Poun...

If the 180-day forward rate for the Pound were GBPARS 21.45 (today GBPARS 19.5) what does this tell you about inflation in Argentina, explain your assumptions and the link with the

Problems in assigning weights, Q. Problems in assigning weights? Proble...

Q. Problems in assigning weights? Problems in assigning weights: for determining the weighted average costs of capital, weight has to assign to the specific cost of the individ

Compute the expected stock price, 1. Using ratio analysis, compare your fif...

1. Using ratio analysis, compare your fifth year to the current year and discuss. 2. Compute the expected stock price at the end of the fifth year. Assume your stockholders hav

Explain about current value, Q. Explain about Current Value? Current Va...

Q. Explain about Current Value? Current Value - (1) Value of an ASSET at present time as compared with asset's HISTORICAL COST. (2) In finance, amount determined by discounting

Value of conversion benefits, Value of Conversion Benefits: Having seen...

Value of Conversion Benefits: Having seen the measure used to analyze the convertible bonds, let us now examine the merits and demerits of convertible bonds and why or why not

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

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