Which Of The Following Is A Working Capital Management Decision?


D, Type of Debt for Inventory is the correct option. It is used to fulfill short-term inventory requirements of an entity. Working capital decisions are made based on the recurring nature of inventory trades.

What Is Working Capital Management Decision?

Management of working capital is a business strategy that ensures that a company operates efficiently by monitoring its current assets and liabilities and taking appropriate steps to maximize their value.

Which Of The Following Is Involved In Working Capital Management?

In working capital management, five main items – cash, trade receivables, trade payables, short-term financing, and inventory – are balanced to ensure a business has the necessary resources to operate efficiently.

Which Of The Following Is An Example Of Working Capital Management?

Working capital is defined as cash, inventory, accounts receivable, and cash equivalents.

What Is A Working Capital Management Decision?

Working capital management refers to the process of managing working capital and short-term financing. In order to achieve this, the policies aim to manage the current assets (generally cash and cash equivalents, inventories, and debtors) and the short-term financing, so that cash flows and returns are acceptable.

What Are The 4 Main Components Of Working Capital?

  • Receivables are also known as account receivables and are included in balance sheet as current liabilities.
  • The inventory of the company.
  • The cash and bank balances.
  • Payables for trade.
  • Which One Of The Following Is A Working Capital?

    Working capital is the amount of raw materials and money in hand. In contrast to tools, machines, and buildings, these are used up in production.

    Which Of The Following Are Included In Working Capital Accounts?

    Cash, as well as other liquid assets that can be converted into cash within one year of the balance sheet date, such as money in bank accounts and undeposited checks, are included in Working Capital. U.S. government securities, for example. Money market funds and Treasury bills.

    What Is An Example Of Working Capital Management?

    In business, working capital refers to the amount of money needed to run the business day-to-day, such as $100,000 with a manufacturer, which is calculated by subtracting $200,000 from $300,000 in current assets.

    What Is Working Capital Investment Decision?

    In the day-to-day operations of a business, working capital is used to access financial resources. The purpose of investing in working capital is to acquire short-term assets and incur short-term liabilities over the long term.

    What Does Working Capital Management Involve?

    The working capital ratio, collection ratio, and inventory turnover ratio are among the key elements of working capital management that are analyzed in order to monitor cash flow, current assets, and current liabilities.

    What Is An Example Of Working Capital Finance?

    Taking a company’s current assets and deducting its current liabilities, net working capital (NWC) is calculated. The NWC of a company would be $20,000 if its current assets are $100,000 and its liabilities are $80,000. Cash, receivables, and inventory are some of the most common current assets.

    Which Of The Following Is An Example Of Working Capital Mcq?

    This is the correct answer to the Working Capital MCQ Question 8 Detailed Solution: Raw Materials. Working capital is the amount of raw materials and available funds.

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