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Importance of Working capital

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Although working capital is rarely disclosed on the balance sheet, it is a useful tool for financial statement users. Who may be interested in this information and for what reasons? Discuss any requirements in this area that an insurance company may be required to meet, and for what reasons.

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Working capital is very important tool for managers to maintain in the business and ensure that it operates smoothly and does not close down due to paucity of funds.

Cash flows in a cycle into, around and out of a business. It is the business's life blood and every manager's primary task is to help keep it flowing and to use the cashflow to generate profits. If a business is operating ...

Solution Summary

Working capital is very important tool for managers to maintain in the business and ensure that it operates smoothly and does not close down due to paucity of funds.

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Importance of Working Capital Management

Explain why working capital management has become increasingly important in the current business environment. Provide at least two examples of organizations that have good working capital management policies, and two examples of organizations with poor working capital management policies. Be sure to explain why the policies of your selected organizations are effective and ineffective.

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