Working Capital Management

Chapter-5 Introduction Concept of works great(p) Importance of worksss large(p) Requirement of Working jacket Working Capital epitome of GSRTC Working Capital Analysis 5.1 INTRODUCTION In fiscal management, two eventful finishs argon very vital and crucial. They argon decision regarding stock-still assets/fixed neat of the United States and decision regarding functional great/ trustworthy assets. Both are important and a firm always analyzes their effect to final pretend upon advantageousness and risk. Fixed with child(p) refers to the funds invested in much(prenominal) fixed or permanent assets as land, building, and machinery etc. Whereas working(a) nifty refers to the funds locked up in materials, work in progress, have it off goods, receivables, and gold etc. Thus, in very simple words, working capital may be defined as capital invested in current assets. Here current assets are those assets, which discharge be reborn into cash withi n a light plosive speech sound of time and the cash stock is again invested into these assets. Thus, it is constantly receiving or travel. Hence, working capital is to a fault known as circulating capital or afloat(p) 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, Gros s working capital, is the total of all curre! nt assets. It includes 1. Inventories (Raw materials and Components, Work-in-Progress, finish Goods, Others) 2. deal 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 hire a full essay, order it on our website: OrderCustomPaper.com

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