Working Capital Management

Chapter-5 Introduction Concept of works great(p) Importance of running(a)s ceiling Requirement of Working groovy Working Capital digest of GSRTC Working Capital Analysis 5.1 INTRODUCTION In fiscal management, two grand lasts atomic number 18 very vital and crucial. They be decision regarding stock-still assets/fixed neat of the United States and decision regarding functional bang-up/ present-day(prenominal) assets. Both are important and a firm always analyzes their effect to final dissemble upon advantageousness and risk. Fixed metropolis refers to the funds invested in such(prenominal) fixed or permanent assets as land, building, and machinery etc. Whereas functional(a) hood refers to the funds locked up in materials, work in progress, go off goods, receivables, and cash etc. Thus, in very simple words, working capital may be defined as capital invested in current assets. Here current assets are those assets, which outhouse be reborn into cash within a shortsighted plosive speech sound of time and the cash current is again invested into these assets. Thus, it is constantly receiving or travel. Hence, working capital is as well as known as circulating capital or directionless capital. 5.2 CONCEPT OF WORKING CAPITAL in that location are two concepts of working capital. These are: 1.

vulgar working capital: (Total actual Assets) The gross working capital, simply called as working capital refers to the firms investment in current assets. Current assets are the assets, which can be converted into cash within an accounting year or operational cycle. Thus, Gross working capi! tal, is the total of all current assets. It includes 1. Inventories (Raw materials and Components, Work-in-Progress, finish Goods, Others) 2. duty Debtors 3. Loans and Advance 4. Cash and Bank Balances 5. Bills Receivables. 6. Short-term Investment 80 Working Capital Analysis 2. Net Working Capital: (Total Current Assets Total Current Liabilities) Net working capital refers to the remnant between current assets and current liabilities. Current...If you want to create a full essay, order it on our website: OrderCustomPaper.com

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