Working Capital Management Policies
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Could you give me two examples of organizations with poor working capital management policies? Please explain why the policies of your selected organizations are effective or ineffective.
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Solution Summary
This solution of 385 words defines working capital and gives two examples of organizations with poor working capital management. It justifies which specific strategy is effect or ineffective and why.
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Working capital is the difference between current assets and current liabilities. It's a measure of liquidity. If a company has poor working capital management strategies then it will not be prepared for anything out of the ordinary. It may not even have enough cash to pay regular bills. It's similar to an individual with too much credit card debt. Eventually, so much money goes to keeping the debt current that there isn't money left for rent, food, or gas.
One common working capital policy that gets businesses in ...
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