working capital management includes which one of the following? ⋆ BizToolsPro.net - Bringing you Pros & Cons for the Top Online Business Tools

working capital management includes which one of the following?

Working capital management includes managing a company’s short-term financial resources, such as cash, accounts receivable, and inventory. It involves making sure that a company has sufficient liquidity to meet its day-to-day financial obligations and support its operations.

Some specific activities that fall under the umbrella of working capital management include:

  1. Managing cash flow: Ensuring that a company has sufficient cash on hand to meet its short-term financial obligations, such as payroll, rent, and taxes.

  2. Managing accounts receivable: Ensuring that a company’s customers pay their invoices on time and that the company has a process in place for collecting outstanding payments.

  3. Managing inventory: Ensuring that a company has the right amount of inventory on hand to meet customer demand without tying up too much cash.

  4. Managing debt: Ensuring that a company has a healthy debt-to-equity ratio and that it is able to make its debt payments on time.

  5. Managing working capital ratios: Analyzing key financial ratios, such as the current ratio and the quick ratio, to assess a company’s liquidity and financial health.

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