Why is it important to understand the ability to evaluate investments in fixed assets when analyzing an organization's overall success or failure?© BrainMass Inc. brainmass.com June 4, 2020, 5:12 am ad1c9bdddf
An organization's success or failure entails its competence in appraising its working capital management (investments in fixed assets). Brigham, Eugene, & Joel (2014) stated, "Working capital management involves finding the optimal levels for cash, marketable securities, accounts receivable, and inventory, and then financing that working capital at the least cost. Effective working capital management can generate considerable amounts of cash" (p. 520, para. 1). Positive working capital normally signify that a firm can pay off its short-term liabilities at short notice. Negative working capital typically indicates that a company cannot pay off its short-term liabilities almost instantly. This is the ...
Working capital management (fixed assets) can result in the success or failure of an organization are examined. References are provided to further aid in the understanding.