Metrics available for working capital management
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Need Assistance on the following question:Identify and discuss two metrics available for working capital management. Explain the metric and their role in this critical area. Also discuss any ways the metric can be improved to aid the firm's cash position.
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This solution assists in identifying metrics available for working capital management.
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Working capital is the firm's total current assets used in operations. Working capital = total current assets. These current assets include cash, marketable securities, prepaid expenses, accounts receivable, inventory, and other current assets. Working capital represents the liquid portion of the firm. Net Working Capital means the difference between current assets and current liabilities, and therefore, represents that position of current assets, which the firm has to finance either from long-term funds or bank borrowings.
Two metrics
Accounts receivable turnover ratio
It indicates ...
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