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Define worCapital Budgeting and Capital Planningking capital, its management and techniques. What is capital planning, IRR?

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1. What is the definition of working capital? What may happen if an organization neglects to manage its working capital? What techniques do you recommend for your organization? Why?

2. What is capital planning? Why is the internal rate of return important to an organization? Why is net present value important to a project? How do you select from multiple projects presented to your organization?

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The following posting helps with a problem about capital budgeting. It discusses the definition of working capital and discusses capital planning. The explanation is given in 380 words.

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1. What is the definition of working capital? What may happen if an organization neglects to manage its working capital? What techniques do you recommend for your organization? Why?

Working capital can be defined as a difference between current asset and the current liabilities. Positive working capital indicates that the company is able to pay off its entire short-term obligation whereas the negative working capital indicates that the company is not able to pay its short-term obligation and hence requires additional fund to do it.

If an organization neglects to ...

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Jayant Kumar, MBA
Education
  • MBA, Indian Institute of Finance
  • Bsc, Madras University
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