Please help me with this. Please use an original example, not one copied off internet. Thank you.
1) What is working capital and how would you calculate it?
2) How can a hospital improve their working capital?
3) What are the great approaches for cash management?
4) If you are the controller who is in charge of managing cash, what methods would you take and why?
1) Working capital is of two types. Gross working capital and net working capital. Gross working capital is the amount invested in current assets. Net working capital is the difference between the current assets and current liabilities. If the total current assets of hospital are $250,000 and current liabilities of the hospital are $100,000 then the gross working capital is $250,000 and the net working capital is $150,000 ($250,000-$100,000). The working capital is the ability of the company to repay its current liabilities out of the current assets of the company. It is the measure of the short-term solvency of the company. Positive working capital denotes that the liquidity position of the company is sound. If the working capital is negative, then it indicates that the company ...
This solution explains the concept of 'working capital' and how a hospital could improve theirs, as well as strategic approaches for cash management.