Introduction
Management of working capital as stated in business dictionary, “The process of managing activities and processes related working capital. The level of management services as a check and balance system ensures that the amount of cash flowing into a business is enough to sustain a company’s operations. This is an ongoing process that needs to be evaluated using current level of assets and liabilities. Such a working capital involves implementing short-term decisions which can or cannot carry over from earnings period to the next (www.businessdictionary.com)”.
The main purpose for the working capital management is to continue its operations with the sufficient ability in satisfying both maturing short-term debt as well as upcoming operational expenses in a firm. Inventories, accounts receivable, payable, and cash are all managed by the working capital management with the necessary of a well working capital management system needs to continue to be a way for many companies to improve their earnings. Ratios analysis and management of individual components of a working capital are two main aspects of this capital.
The working capital practices of George’s Trains
George’s Trains working capital is unique in every way, but there is a difference between its total current assets and total current liabilities. Since the total current assets is more than the total current liabilities, then George’s Trains net working capital will be positive instead of being negative. Then there is a fair amount of contribution this firm has as of made by the owner. With carefully looking at the video more than once, I notice how slowly the business activity for George’s Trains improved with him offering certain days of credit to c...
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...alty in trading, sales, and in repairing model trains with also model accessories. So with all being said, George’s Trains have been managed well in its ratio between current assets and liabilities.
Reference
Working capital management. Retrieved April 24, 2014, from http://www.businessdictionary.com/definition/working-capital-management.html
Working capital management. (1999-2014). Retrieved April 24, 2014, from http://www.studyfinance.com/lessons/workcap/
Gallant, C. (2009). What are the disadvantages of using net present value as an investment criterion? Retrieved April 25, 2014, from http://www.investopedia.com/ask/answers/06/npvdisadvantages.asp
Management of Working Capital Case Study: “George’s Trains”. (2013). Retrieved April 25, 2014, from http://www.researchomatic.com/management-of-working-capital-case-study-georges-trains-170012.html
Within this approach, we are analyzing how does Rio Tinto use their resources and capabilities in order to create value and competitive advantage. Their consistent and longstanding strategy has been successful - investing in and operating low-cost, long-life and expendable operations (Rio Tinto, 2015).
Williams, P 1998, 'Australian Very Fast Trains-A Chronology', Economics, Commerce and Industrial Relations Group, Canberra, viewed 28 April 2011, < http://www.aph.gov.au/library/pubs/bp/1997-98/98bp16.htm#INTRO>.
Sydney Trains Annual Report 2013-14 Notes to the Financial Statements for the period finished 30 June 2014 Note 13 Provisions
The management of working capital involves managing inventories, accounts receivable and payable, and cash. (Study Finance: Working Capital Management)
DOWNER is Australia and New Zealand’s largest marketing business which provides state of the art technology and innovation in Transportation, Communications, Rail and Engineering, Mining, Construction and Maintenance. DOWNER provides a cardinal role when it comes to Transportations in Australia and New Zealand. They also invest in strategic partnership to allocate growth in their business. Downer joint ventures to Keolis, Bombadier and Electro-motive Diesel have also lead in advancement when it comes to transport business. This joint ventures is now Australia’s private sector which provides public transport that operates a fleet of 900 buses in South Australia, Western Australia and Queensland. Providing good quality and excellence services to their customers, thus ensuring compliance and good credibility of their business to the community. Downers plays a big part in economic stability of both country and employs a large number of people. Nowadays, there is always a risk management group that is outlined in every business operation of every business firm. The role of the risk management is to identify all the possible
It may require additional working capital (operating expenditure) to solve cash flow challenges; it may require the additional capital for a particular acquisition (capital expenditure) or it may require a one-off borrowing to avert a looming financial crisis .
Liquidity ratio often called working capital ratio is the ratio used to measure how liquid a company by comparing all components in current assets and current liabilities components. There are two assessments to measure this ratio, as follows:
The aim of the study is to analyze the efficiency of working capital management in Thai Beverage Public Company Limited.
The amount of working capital for Competition Bikes has steadily grown every year. Because of the manner in which they have distributed their assets and liabilities, they are not benefitting the best way possible. Their cash and equivalents grew more than $300,000 from year seven to eight. The excess money however was not used to invest in new product ideas or to pay debt, hurting their working capital. They also had an increase in their accounts payable during this same time by $65,300 showing they do not pay off debt when they have the money to do so. They experi...
Efficient working capital management is necessary for achieving both liquidity and profitability of a company. A poor and inefficient working capital management leads to tie up funds in idle assets and reduces the liquidity and profitability of a company. Working capital management efficiency is vital especially for manufacturing firms, where a major part of assets is composed of current assets. For an intensive study of working capital management of Indian steel industry focus of the study is on major and significant players of the industry of public and private sector via Steel Authority of India Ltd., Tata Steel Ltd, JSW Steel Ltd. and Essar Steel Ltd. The objective of this study is to measure working capital managing efficiency of selected Indian steel companies for which different activity ratios are used in appraising the efficiency of selected companies. Cash Conversion Cycle (CCC) is a powerful measure for assessing how well a company is managing its working capital. It is used as a comprehensive measure for working capital management and to analyse profitability and performance of selected companies inter firm comparison is done to their judge performance. The ratios of ROCE, assets turnover and
When compared to the physical capital maintenance concept, the financial capital maintenance concept is the better choice for standard setting when distinguishing between a return of capital and a return on capital. The main argument in favor of physical capital maintenance is that it provides information that has better predictive value, confirmatory value, and is more complete. However, due to agency theory, prospect theory, and positive accounting theory, neutrality and completeness under physical capital maintenance would be impaired so gravely that predictive value and confirmatory value become inefficacious. As a result, financial capital maintenance, with its use of historical cost, is able to provide information to decision makers with stronger confirmatory value and predictive value.
The 'Australian Post' spreads a substantial measure of administrations in diverse trains. It might need enormous measure of sub-methodologies and sub-errands to be performed to achieve the focused on business legitimacy. These set of administrations and forms directed by Australian posts comprised of three essential administrations or business results. These administrations or business coherence might be decayed to a much deeper level for making these benefits much less demanding to comprehend and advance. Decomposition is essentially breaking a procedure enthused about non-excess operations or is a dissection of vector field.
The management of cash is essential to the survival of any organization. Managing an organization’s financial operation requires knowledge of the economy and ways to maximize revenue. For any organization to operate on a daily basis adequate cash flow is required. Without cash management the organization will be unable to function because there is no cash readily available in case of inconsistencies in the market. Cash is also needed to keep the cycle of the company’s operations going.
Capital budgeting is one of the primary activities of a company. Most of the company uses capital budgeting for decision making process of selecting and evaluating long-term investment. The company have to make a right decision with respect to investment in fixed asset such as purchasing of new equipment and delivery vehicles, constructing additions to buildings and many more. The decision must be right because of the project involve huge amount of cash outflow and it is committed for many years.
If there is sufficient working capital than we can assume that it has sound financial position and if the business is under trading than there will be increment in liquid assets which shows that the funds are not been utilized and kept ideal.