Chat with us, powered by LiveChat Overview Working capital management is critical to an organization?s ability ?to meet its short-term oblig - Wridemy

Overview Working capital management is critical to an organization?s ability ?to meet its short-term oblig

 

Overview

Working capital management is critical to an organization’s ability  to meet its short-term obligations. When proposing new projects or  investment ideas for corporations, it is critical to consider working  capital red flags such as excess credit use by the business or a low  cash balance. Managing such issues early on can help corporations  acquire a competitive advantage in the marketplace.

Prompt

Using the business you selected for Project Two, complete the  calculations for determining working capital, and describe their  relevance in assessing financial health.

Specifically, you must address the following rubric criteria:

  • Financial Statement(s): Explain the various  financial statement(s) needed to calculate a business’s working capital  and how each financial statement is used. Provide examples to support  your claims.
  • Working Capital’s Role: Discuss how effective working capital management supports a healthy business.
  • Working Capital Interpretation: Use the appropriate formula to calculate working capital, then discuss the business’s current financial liquidity position. 
    • For example, does the business have sufficient working capital on  hand to address bills to suppliers? Will there be potential cash inflow  at the end of the year?
  • Working Capital Management Direction: Discuss the current direction of the business regarding working capital management. 
    • Keep in mind that financial statements reflect a specific moment or  period of time and the value of the business’s working capital during  that period. To get a better understanding of the direction in which a  business is going, use the business’s balance sheets from Mergent Online  to compare the business’s value today against its value from one year  ago.

Guidelines for Submission

Your submission should be a 2 to 3-page Word document with 12-point  Times New Roman font, double spacing, and one-inch margins. Any sources  should be cited according to APA style

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