Sources of funds, Cost Accounting

We have noticed that working capital is needed to finance that portion of current assets that is not financed through current liabilities. We also noticed that the investments represented through current assets are converted in cash throughout the operating cycle. It implies that our requirement for financing is for one such cycle. In normal circumstances every unit of investment in working capital is transformed in cash at the end of the cycle at an added value, for the extent of profits.

While we are looking at the possible sources of working capital the most significant source is this 'internal generation'. The very concept of internal sources shows that there is something 'external'.

Posted Date: 4/9/2013 1:38:05 AM | Location : United States







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