Describe working capital decision, Financial Management

Assignment Help:

Q. Describe Working Capital Decision?

Working Capital Decision: - It is anxious with the management of current assets. It is a significant function of financial management. Current assets must be managed in such a way that the investment in current assets is neither insufficient nor unnecessary funds are locked up in current assets.

If a firm doesn't have adequate working capital that is its investment in current assets is inadequate it may turn into illiquid and as a result mayn't be able to meet its current obligations.
In contrast if the investment in current assets is too large the profitability of the firm will be adversely affected for the reason that idle current assets will not earn anything.

Related Discussions:- Describe working capital decision

Scope of finance functions, SCOPE OF FINANCE FUNCTIONS The functions of...

SCOPE OF FINANCE FUNCTIONS The functions of Financial Manager can generally be sub-divided into two: The Routine functions and the Managerial Functions. Managerial Finance F

Traditional approach of financial management, Q. Traditional Approach of Fi...

Q. Traditional Approach of Financial Management? Traditional Approach: - Under this schema the role of financial management was limited to the procurement of funds on suitable

Parallel trade, Parallel T rade It is a form of countertrade th...

Parallel T rade It is a form of countertrade that involves the execution of 2 distinct and individually enforceable contracts: the first for the sale of goods by an exp

Capital budegting, SCL Limited a highly profitable company is engaged in th...

SCL Limited a highly profitable company is engaged in the manufacture of power intensive products.

Operating cycle, operating cycle of a vegetable growing business

operating cycle of a vegetable growing business

Convexity measure , We can measure the convexity with the help of following...

We can measure the convexity with the help of following formula: ...Eq. (4) Where, Δ

Define the common pattern of cash flows, What is the common pattern of cash...

What is the common pattern of cash flows for a share of preferred stock? How does the market define the value of a share of preferred stock, specified these promised cash flows?

Basic concepts of assessing trading strategies, Leveraging can be described...

Leveraging can be described as an investing principle where borrowed funds are invested in a part of the securities. Leveraging can magnify either returns o

Cash flow statement, Given below are the cash flows of a project. Find out ...

Given below are the cash flows of a project. Find out the net present value of the project. Cost of capital is 18% and initial investment is Rs. 2,00,000. Year Cash Flows (lakhs)

Shoppers stop, how are indian customers visiting shoppers stop

how are indian customers visiting shoppers stop

Write Your Message!

Name

Email id

Message

Verfication Code

User Account

All Pages