study material on finance 23

May 14th, 2015
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Adelphi University
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Financial system is that part of economy, which includes all the financial institutions and markets involved in –Moving savings from savers to borrowers

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PRESENTED BYAJAY KUMAR.BWORKING CAPITALCONCEPT OF WORKING CAPITALCONCEPT OF WORKING CAPITAL ORCIRCULATING CAPITAL INDICATES CIRCULARFLOW OF MONEY IS DAY-TO-DAY OR ROUTINEACTIVITES OF BUSINESS.IN BROAD SENCE WORKING CAPITAL IS USEDTO DENOTES THE TOTAL CURRENT ASSETS.IMPORTANCE OF WORKING CAPITALIMPORATNCE OF WORKING CAPITAL Cashdiscount Liquidity and solvencyExpansion facilitated Profitabilityincreased.TYPES OF WORKING CAPITAL1.On the basis of concept(a) gross working capital(b) Net working capital2.On the basis of Requirement(a) permanent(b) Variable exp- seasonalGROSS WORKING CAPITAL(GWC)Gross working capital (GWC)GWC refers to the firms total investmentin current assets.Current assets are the assets which canbe converted into cash within anaccounting year (or operating cycle) andinclude cash, short-term securities,debtors, (accounts receivable or bookdebts) bills receivable and stock(inventory).NET WORKING CAPITAL (NWC)Net working capital (NWC) NWC refers to the difference betweencurrent assets and current liabilities. Current liabilities (CL) are those claimsof outsiders which are expected tomatureforpaymentwithinanaccounting year and include creditors(accounts payable), bills payable, andoutstanding expenses.PERMANENT AND VARIABLE WORKING CAPITALPermanent or fixed working capitalA minimum level of current assets, which iscontinuously required

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