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Working Capital and Cash Management in the Health Care Industry: Financial/Managerial Accounting Improving Working Capital

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In Essentials of Healthcare Finance:
What is working capital and how would you calculated it?
How they can improve their working capital?
What are the great approaches for cash management? If you are the controller who is in charge of managing cash, what methods would you take and why?

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Solution Summary

Financial and managerial accounting to improve working capital is examined by the expert. Great approaches for cash management are determined.

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Working capital is the capital generated through the day-to-day operations of a company. Working capital is calculated by taking current assets - current liabilities. It is very important for a company to manage its working capital correctly, because even if a company is profitable, if its working capital goes negative, it risks financial bankruptcy as it no longer has the cash on hand to pay its debts and obligations. Current assets includes cash, accounts receivables and inventory. Current liabilities includes accounts payable. In order to ...

Solution provided by:
Robert Reinhart, MBA
Education
  • MBA, Merage School of Business, Univ of Cal, Irvine
  • BA, Univ of Cal, Irvine
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