Purchase Solution

Working Capital DQ

Not what you're looking for?

Ask Custom Question

How do business managers determine that acquiring a given working capital asset would help their company financially?

What type of working capital asset is time-consuming to manage and why? Explain, if a current ratio <1, does it help management identify a financial problem?

Purchase this Solution

Solution Summary

This solution looks at how business managers go about determining whether or not a given working capital asset would help their company financially and explains the type of working capital asset that is especially difficult to deal with for business managers. Additionally, the solution explains why a ratio of <1 will help business managers to identify a financial problem.

Solution Preview

The equation for working capital is current assets (cash, accounts receivable, inventory, marketable securities, prepaid expenses and other liquid assets that can be readily converted to cash) minus current liabilities (accounts payable, salaries/wages payable, taxes payable, short-term interest payable): the equation looks like current assets - currrent liabilities = working capital.

One way business managers can determine if a ...

Solution provided by:
  • Doctorate of Management in Organizational Leadership, University of Phoenix - Online
  • MBA, Webster Univeristy
  • Dual BS Degrees, University of South Carolina
Recent Feedback
  • "Thank you"
  • "Thank you so much! This helps me understand this a lot more. Thank you!"
  • "Thank you."
  • "Thank You, Keonda! Your response is very much appreciated."
  • "Thanks!"
Purchase this Solution

Free BrainMass Quizzes
Learning Lean

This quiz will help you understand the basic concepts of Lean.

Managing the Older Worker

This quiz will let you know some of the basics of dealing with older workers. This is increasingly important for managers and human resource workers as many countries are facing an increase in older people in the workforce

Accounting: Statement of Cash flows

This quiz tests your knowledge of the components of the statements of cash flows and the methods used to determine cash flows.

Change and Resistance within Organizations

This quiz intended to help students understand change and resistance in organizations

Paradigms and Frameworks of Management Research

This quiz evaluates your understanding of the paradigm-based and epistimological frameworks of research. It is intended for advanced students.