Which of the following accounts are included in working capital management?

accounts payable, accounts receivable, inventory More test answers on https://studyhippo.com/ch-1-finance/

Which one of the following is a working capital management decision?

Determining whether to pay cash for a purchase or use the credit offered by the supplier. More test answers on https://studyhippo.com/fin-ch-1-hw/

Which of the following is part of the controller’s function? A. Determining the feasibility of various projects B. Financial planning C. Managing short and long term capital requirements D. Working capital management E. Preparing financial statements and reports

E. Preparing financial statements and reports More test answers on https://studyhippo.com/finance-quiz-1/

Working capital management is primarily concerned with the management and financing of what?

current assets More test answers on https://studyhippo.com/finance-ch-6/

The decision to issue additional shares of stock is an example of which one of the following? Capital structure decision. Controller’s duties. Capital budgeting. Net working capital decision. Working capital management.

Capital structure decision More test answers on https://studyhippo.com/fin-3403-ch-1-hw/

Working capital management includes which one of the following? A. deciding which new projects to accept B. deciding whether to purchase a new machine or fix a current machine C. determining which customers will be granted credit D. determining how many new shares of stock should be issued E. establishing the target debt-equity ratio

C, determining which customers will be granted credit More test answers on https://studyhippo.com/fin-331-chap-1/

Which one of these is a working capital management decision? 1. Determining the minimum level of cash to be kept in a checking account. 2. Determining the best method of producing a product. 3. Determining the number of employees needed to work during a particular shift. 4. Determining when to replace obsolete equipment. 5. Determining if a competitor should be acquired.

Determining the minimum level of cash to be kept in a checking account More test answers on https://studyhippo.com/financial-managment-chapter-1-quiz/

Which one of these is a working capital management decision? -Determining the best method of producing a product. -Determining the number of employees needed to work during a particular shift. -Determining when to replace obsolete equipment. -Determining if a competitor should be acquired. -Determining the minimum level of cash to be kept in a checking account.

Determining the minimum level of cash to be kept in a checking account. More test answers on https://studyhippo.com/financial-management-chapter-1/

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Working Capital Management Flashcards, test questions and answers

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What is Working Capital Management?

Working capital management is an important aspect of financial management that deals with the efficient use of funds to ensure optimum liquidity and profitability. It is the process of monitoring and managing current assets and liabilities to ensure that they are used effectively in the most cost-efficient manner. Working capital management involves decisions related to short-term financing, accounts receivable, inventory, accounts payable and cash flow.The primary objective of working capital management is to manage current assets and liabilities in such a way as to maximize short-term liquidity while minimizing risk associated with illiquidity. Proper working capital management enables a business to take advantage of opportunities available in the market by having sufficient resources on hand. This can help businesses expand their operations or utilize new technologies without compromising their cash flow or ability to meet obligations. To achieve this goal, businesses must closely monitor their current assets and liabilities on a regular basis and make timely decisions regarding them accordingly.When assessing its working capital position, a business should consider both its current assets (cash, inventory, accounts receivable) as well as its current liabilities (accounts payable). An efficient working capital position is one where a company has enough liquid resources available at all times so it can pay its bills when due without incurring any additional debt or borrowing costs that could compromise profitability or liquidity. A business should also strive for an optimal balance between immediate liquidity needs versus long-term goals so it can remain competitive over time while avoiding unnecessary risk from illiquidity or excessive reliance on external financing sources such as banks or investors. In addition, good working capital practices involve properly managing credit facilities (e.g., lines of credit) provided by creditors in order to ensure adequate funding during periods of peak demand but not overuse them so as not incur high interest charges which could erode profits significantly over time. Companies must also constantly review their accounts receivables collection performance regularly for prompt payment from customers whilst maintaining good relationships with them at the same time. Lastly , companies must carefully plan out cash flows by accurately forecasting sales expectations , expenditure requirements , and other varying inflows/outflows which could impact overall cash position. Overall , effective working capital management helps companies optimize their use of funds while ensuring they have access to enough financial resources when needed in order create value for shareholders. With solid strategies in place , businesses will be able to quickly respond when unexpected changes occur while retaining enough flexibility within operations so they stay ahead competition.