Working Capital

Here are other items that require cash (inflows or outflows), which have not appeared in this simple example.

To run a business day-to-day requires cash. Firms must put money into cash registers (to make change), into inventories (to have something to sell), and into extending credit to buyers (to get them to bite). This is called working capital. Accountants define working capital as current assets minus current liabilities. Current Assets are cash, accounts receivables, and

The definition of working capital.

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