In this article we will discuss about the impact of overtrading, under capitalization on working capital. Impact of Overtrading on Working Capital: Overtrading arises when a business expands beyond the level of funds available. Overtrade means an attempt to finance a certain volume of production and sales with inadequate working capital. If the company does not have enough funds of [...]
The following article will guide you about how to calculate working capital. One of the important objectives of working capital management is by maintaining the optimum levels of investment in current assets and by reducing the levels of current liabilities, the company can minimize the investments in working capital thereby improvement in return on capital employed is achieved. The term [...]
In this article we will discuss about:- 1. Meaning of Working Capital 2. Components of Working Capital 3. Gross and Net Working Capital 4. Permanent and Temporary Working Capital 5. Positive and Negative Working Capital 6. Objectives. Meaning of Working Capital: Working capital management is a significant in financial management due to the fact that it plays a pivotal role [...]