FIN 320 Week 3 Individual Assignment Working Capital Management Paper

Apr 24th, 2015
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FIN 320 Week 3 Individual Assignment Working Capital Management Paper

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Running head: WORKING CAPITAL MANAGEMENT PAPERWorking Capital Management PaperUniversity of PhoenixWorking Capital Management PaperThere are many factors that can dictate an organization's ability to succeed and meet the high demands of doing business. Yet none may be as important as working capital, given that "Cash is the lifeline of a company. If this lifeline deteriorates, so does the company's ability to fund operations, reinvest and meet capital requirements and payments" (McClure, n.d., 1). This paper will examine the importance of working capital in the current business environment. Working capital is a company's current assets and can be in the form of: cash, accounts receivable, securities, inventory, and pre-paid expenses. These current assets or working capital are the fuel, which drives the engine that is the company. Companies that operate in the current business environment incur many expenses and liabilities or future expenses, their ability to satisfy their creditors and maintain in operation is absolutely dependant on their working capital management policies. A company must have sufficient working capital so that it may stay in business; yet, re-invest it wisely to allow for growth and development. Due to the current status of the American economy, businesses across the country are placing a greater importance on how they manage their working capital. Not only does it help ensure their survival through these tough times, but any organiz

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