Working capital discussion question

Business & Finance
Tutor: None Selected Time limit: 1 Day

How do you define working capital? What may happen if an organization neglected to manage its working capital? What techniques do you recommend for your organization? Why?

Please provide links for any information used. Should be at least 250-300 words

Sep 29th, 2015

Thank you for the opportunity to help you with your question!

Well, working capital are the funds used in order to take care of the operations cost in a business.  A company must keep  the working capital coming because if they do not they would go into a deficit and have to take from other available funds in order to keep the business operational.  If a company neglected to keep an eye on thier working capital they would run the risk of having profit but they would suffer more of a loss.

Depending on the size of the organization you would want to make sure that you have enough working capital to make sure that you can keep your organization afloat if not it could fold.  If it is a small organization you have to make sure your profit fits proportionately with your working capital.

Please let me know if you need any clarification. I'm always happy to answer your questions.
Sep 29th, 2015

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