Important points for working capital cycle, Finance Basics

Assignment Help:

Important points for Working Capital Cycle

A lengthy working capital cycle is a sign of poor management of debtors and stock reflecting low turnover of debtors and stock and lengthy stockholding period and debtor's collection period.

The working capital cycle can be reduced in any of the next ways like:

1. Negotiate for a longer credit duration along with the suppliers

2. Reduce the stock conversion duration or manufacturing duration.

3. Reduce the debtor's collection period via granting short crediting duration. This can be achieved throughout offering discounts to encourage to customers them to pay earlier.

4. Holding fast moving goods to ensure high turnover.

5. Timely delivery of raw materials via suppliers especially whether any delay in delivery will lengthen the raw materials holding duration.


Related Discussions:- Important points for working capital cycle

MONEY AND BANKING, Define and explain the credit multplier

Define and explain the credit multplier

Necessity of risk adjusted hurdle rates for companies, Discuss the necessit...

Discuss the necessity of risk adjusted hurdle rates for companies with diverse lines of business. Every company invests in new projects based on the expectation of earnings

Financial management, Financial Management On the other hand a financi...

Financial Management On the other hand a financial manager has to meet the company's strategic or long term needs as long term investment are helpful to the company since:

Primary markets - financial markets, Primary Markets - Financial Markets ...

Primary Markets - Financial Markets These are markets such deal along with securities that have been issued for the first moment. The money flows directly from transferor or t

Running own small businesss, how to do basic accountancy and what can i cla...

how to do basic accountancy and what can i claim back

Characteristics of sole proprietorship, Characteristics of sole proprietors...

Characteristics of sole proprietorship The main characteristics of sole proprietorships are as follows: 1) Ownership- The ownership of the business unit is by one person.

PERDIEM CLAIM, how to make a perdiem claim format to maintain the records o...

how to make a perdiem claim format to maintain the records of staff

Explain the different life insurance products, Question: Company XYZ cu...

Question: Company XYZ currently operates a General Insurance company and would like to start selling life insurance products. The intended market is composed of both financial

Financial intermediaries, Financial Intermediaries These are instituti...

Financial Intermediaries These are institutions that link or mediate between the investors and savers: Some examples of financial intermediaries are as follow: 1. Comme

Weaknesses of wacc as discounting rate, Weaknesses of WACC as Discounting R...

Weaknesses of WACC as Discounting Rate WACC/Overall cost of capital has the following problems like a discounting rate as:  It can simply be used as a discounting

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd