Article Writing Homework Help. Write 6 pages with APA style on Managing Finance. And that’s when it is said that this particular business is having cash-flow problems. The daily operations working capital is used to manage include,
Write 6 pages with APA style on Managing Finance. And that’s when it is said that this particular business is having cash-flow problems. The daily operations working capital is used to manage include, stock purchases, salaries and wages, heating and lighting expenses, funding of credit sales etc. (McKosker, Philip, March 1, 2000)
Components of working capital include all those things that form part of the definition of working capital since working capital equals current assets less current liabilities, all those things that are categorized under these two things can be called a component of working capital. The three main components namely are, inventory, payables and receivables.
Inventory here includes all the stock, opening plus closing. (Managing Working Capital, n.d.) Inventory also includes raw materials,work-in-progress stock of goods and even finished stock of goods. These all are categorized under the assets portion on a business balance sheet. (Inventory, 2008)
Inventory payables refers to a business’s creditors who are those people or institutions from where you borrow loans or buy good/stock from on credit. A creditor is hence an organization or person who gives out credit to other businesses. A business pays these people at the end of a term or after a set time period as arranged or agreed upon through a contract. (Creditor, 2008)
Receivables, on the other hand are those people or organizations that owe the business rather.