1 / 6

Working Capital

Working Capital. Working Capital. Working Capital – having sufficient funds at the right time to be able to meet liabilities Working capital management is crucial to the success of a firm Working capital = the difference between current assets and current liabilities. Working Capital Cycle.

trilby
Download Presentation

Working Capital

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Working Capital

  2. Working Capital • Working Capital – having sufficient funds at the right time to be able to meet liabilities • Working capital management is crucial to the success of a firm Working capital = the difference between current assets and current liabilities

  3. Working Capital Cycle Start up capital/shareholders funds

  4. Causes of WC Problems • External changes – interest rate rise, elasticity • Poor credit control – not getting the money in! • Internal problems – Extra costs, lower revenues • Financial Mismanagement

  5. Implication of poor WC • Weakened Market Position • Difficulties with creditors • Damage corporate image (Enron)

  6. Progress Questions • What happens if a company has a large surplus of WC? • What could organisations do to cut their WC figure? • The major cause of liquidity problems is poor management of working capital. To what extent do you agree with this statement? (15 marks)

More Related