UHY Dawgen will be publishing a series of Business Improvement Strategy over the next 3 months.The first in the series will focus on Working Capital Management.
Working capital is one of the most difficult financial concepts for the Business owners to understand. In fact, the term means a lot of different things to a lot of different people. By definition, working capital is the amount by which current assets exceed current liabilities. However, if you simply run this calculation each period to try to analyze working capital, you won’t accomplish much in figuring out what your working capital needs are and how to meet them.
Understanding your working Capital Needs is vital for Business especially Small-Business.
The working capital requirement is the minimum amount of resources that a company requires to effectively cover the usual costs and expenses necessary to operate the business. Since the capital needs of each company will be a little different, there is no ideal amount of working capital that is universally applicable to all businesses, or even to companies engaged in the same industry. Even so, new companies can develop an idea of what type of requirement they will need to operate at given levels by researching the cost and expenses associated with other entities engaged in similar operations.Download your copy here
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