Growth profitability and Financial ratio

Jun 21st, 2015
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Mother care is large organization which is serving customers from almost four decades. Information is passed through a process, top management or leadership set a goals for the betterment of organization and then they allocate tasks to relevant department heads or leaders.

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Working capital management, which involves management of the current assets and the current liabilities of a firm. A firm's value cannot be maximized in the long run unless it survives the short run. In fact, the principal reason firms fail is because they are unable to meet their working capital needs. Thus, sound working capital management is a requisite far firm survival.So, working capital management is, the management of short-term assets (investments) and liabilities (financing sources).Working Capital TerminologyThere are some basic definitions and concepts about working capital. They are as follows:The term working capital, sometimes called gross working capital, generallyrefers to current assets.Net working capital is defined as current assets minus current liabilities.The current ratio, which was discussed in Chapter 11, is calculated by dividingcurrent assets by current liabilities, and it is intended to measure a firm's liquidity. However, a high current ratio does not insure that a firm will have diecash required to meet its needs. If inventories cannot be sold, or if receivablescannot be collected in a timely manner, then the apparent safety reflected in a high current ratio could be illusory.The best and most comprehensive picture of a firm's liquidity position isobtained by examining its cash budget. The cash budget, which forecasts cashinflows and outflows, focuses on what really counts; the firm's ability to generate s

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