1. How does working capital impact a company's finances?
2. What a company can do to handle short-term debt that is coming due?
3. Explain current ratio, discuss its implications, and describe a good current ratio.
4. Describe briefly how businesses make capital budgeting decisions.
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1. A lack of sufficient working capital can seriously hamper operations of a business. At a base level, the company would have trouble meeting current obligations in a timely manner. That is serious because it could be the start of a downward spiral to dissolution or sale. On a more positive note, good working capital can allow a company to take advantage of opportunities such as discounts or volume buys. It could even allow for stock buyback programs, purchase of other companies, or expansion of product mix or geographic expansion. Any notable changes in the working capital ...
The 375 word solution gives a practical and comprehensive response to each question including more than one answer or option for each solution. For example, the response to the short-term debt coming due includes six possible solutions