Define the purpose of working capital?
April 20, 2011 by Cash Flow Tips
Filed under More Cash Flow Answers
Can you answer kitsune12’s question about Cash Flow?:
How does extending credit affect working capital requirements and the cash conversion period (cycle)? what are the consequences of inventory costs on Working Capital needs and the Cash Conversion Period.
Accounts Receivable Factoring Company
How does extending credit affect working capital requirements and the cash conversion period (cycle)? what are the consequences of inventory costs on Working Capital needs and the Cash Conversion Period.
Accounts Receivable Factoring Company
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Cash Flow Feedback: Working capital is also known as operating capital. A most important value, it represents the amount of day-by-day operating liquidity available to a business. A company can be endowed with assets and profitability, but short of liquidity if these assets cannot readily be converted into cash.
Cash Flow Feedback: Define: Firms need cash to pay for all their day-to-day activities. They have to pay wages, pay for raw materials, pay bills and so on. The money available to them to do this is known as the firms working capital.http://www.bized.co.uk/learn/business/accounting/busaccounts/notes/wcap-ex.htm
Here is a very informative web site (if you enjoy reading!):
Extending credit reduces the number of days a firms resources are tied up in a operating cycle..And that can change in each cycle..http://wps.aw.com/wps/media/objects/222/227412/ebook/ch13/chapter13.pdf
That web site will answer all your questions too..ss