Working Capital Calculation

May 19th, 2015
Studypool Tutor
Aberystwyth University
Price: $20 USD

Tutor description

The working capital can also be divided into categories (i) Fixed working capital and (ii) Fluctuating working capital. Every business requires some amount of working capital in spite of the level of operations, throughout the year. This amount represents the fixed amount of working capital.

Word Count: 5491
Showing Page: 1/27
INTRODUCTION TO WORKING CAPITAL1.1 OBJECTIVES OF THE STUDY To find out the investment needs in current assets to sustain the business operations.To find out the percentage increase or decrease (trend analysis) of working capital for the given 5 years.To strike off a Balance between financial stability and profitability through its working capital estimation. To find out the financial position and solvency of the company by calculating the ratios.1.2 METHODOLOGY OF THE STUDY1. Library reference i.e. primary data collection 2. Select an organization 3. Procurement of data Estimation of working capital Trend Analysis Ratios relating to working capital THEORY OF WORKING CAPITAL2.1 INTRODUCTIONThe management of fixed assets and current assets differ from each in three main aspects as given below a) Time factor plays a minor role in managing current assets while it plays a major role in managing fixed assets. Fixed assets management presents values of expected future cash inflows and outflows.b) If a firm maintains a large holding of current assets, in cash, the risk is reduced, but it also reduces the overall profitability.c) Though the fixed and current assets levels depend upon sales, only current assets can be adjusted with sales fluctuations.The importance of working capital management is reflected in the fact that financial managers spend a great deal of time in managing current assets and current liabilities. Arranging short-term financing, neg

Review from student

Studypool Student
" Excellent work as always thanks so much "
Ask your homework questions. Receive quality answers!

Type your question here (or upload an image)

1824 tutors are online

Brown University

1271 Tutors

California Institute of Technology

2131 Tutors

Carnegie Mellon University

982 Tutors

Columbia University

1256 Tutors

Dartmouth University

2113 Tutors

Emory University

2279 Tutors

Harvard University

599 Tutors

Massachusetts Institute of Technology

2319 Tutors

New York University

1645 Tutors

Notre Dam University

1911 Tutors

Oklahoma University

2122 Tutors

Pennsylvania State University

932 Tutors

Princeton University

1211 Tutors

Stanford University

983 Tutors

University of California

1282 Tutors

Oxford University

123 Tutors

Yale University

2325 Tutors