cost $700,000 and will require an additional $50,000 for delivery and installation. The new unit also will require OFC to increase its investment in initial net working capital by $40,000 followed by an increase of $ 10,000 in net working capital in year 1; no further increases in net working capital are anticipated. The working capital investment will be fully recovered at the termination of the project life. The full cost of the new unit will be depreciated on a straight-line basis over 5 years
Words: 541 - Pages: 3
of Economics, Finance and Management Sciences September 2012, Vol. 5 (2) The Effect of Working Capital Management on the Profitability of Turkish SMEs Ece C. KARADAGLI Cankaya University, Department of Banking and Finance Eskisehir Yolu 29. km, Ankara, 06810, Turkey Phone: (90) 312 233 12 04; Fax: (90) 312 233 10 27 E-mail: ece@cankaya.edu.tr 36 Abstract This paper focuses on the effects of working capital management as measured by cash conversion cycle and net trade cycle on the firm performance
Words: 4208 - Pages: 17
Current Ration- Also known as liquidity ratio and working capital ratio shows the proportion of current assets of a business in relation to its current liabilities. Current ratio expresses the extent to which the current liabilities of a business (i.e. liabilities due to be settled within 12 months) are covered by its current assets (i.e. assets expected to be realized within 12 months). A current ratio of 2 would mean that current assets are sufficient to cover for twice the amount of a company's
Words: 431 - Pages: 2
RESEARCH TOPIC: THE IMPACT OF WORKING CAPITAL MANAGEMENT POLICIES ON THE PROFITABILITY OF FINANCIAL INSTITUTIONS: A STUDY OF SOME SELECTED FINANCIAL INSTITUTIONS IN GHANA 1.0 INTRODUCTION 1.1 Background: Financial institutions exist to perform the main function of collecting excess monies in the system and advancing them in a form of loan. Hence the bulk of the working capital resource is loan advances and cash received from customers. Again, the influx and/or springing up of
Words: 1654 - Pages: 7
PUBLIC ACCOUNTANTS AND CONSULTANTS TO BUSINESS Working Capital Management Strategies Working capital strategies has in the past been a responsibility designated to those managers in the accounting and finance departments. However, today’s economy is changing those roles and many managers who traditionally were not part of this process are being called upon to take proactive steps in reducing the risk associated with working capital. Working capital may be a foreign term to some managers and so
Words: 1027 - Pages: 5
September 1, 2014 Suzanne Elliott This week Learning Team D addressed strategies regarding strategies business owners use to manage their working capital. Many business owners find great difficult in working the capital of the organization in favor. Working capital means that the amount of the current assets exceeds the amount of the current liabilities. The entrepreneurs need to first conclude the working capital necessities. In this discussion, most of the focus will be on the bakery market
Words: 701 - Pages: 3
Shin | My strategy will consist of three phases. These phases include: capital shortage, funding options for equipment acquisition and funding options for capital expansion. During these three phases I will observe the necessary financial statements and documents. From this information I will analyze the information and decide the best strategy for improvements. I will not only focus on the goals for the clinic, but long term budget goals as well. Phase I: Capital Shortage There were
Words: 1112 - Pages: 5
Component of Growth Company Financing Strategy High-growth companies, especially ones that rely on high-cost venture or private equity for funding, have the preservation and strategic investment of capital as a top priority. Financing new ventures is a high risk proposition for investors and they seek relatively high returns, or costs of capital, in order to compensate for this risk. Accordingly, high-growth companies typically conserve their high-cost equity capital to fund growth and expansion plans
Words: 443 - Pages: 2
balance sheet. Sales 20 days of sales 360 days of sales Accounts receivable 40 days of sales Inventory Inventory = $400,000 = ($400,000/20) × 360 = $7,200,000 = ($7,200,000/360) × 40 = $800,000 = Sales/6 = $7,200,000/6 = $1,200,000 Working capital requirement (WCR): WCR = .20 × Sales = .20 × $7,200,000 = $1,440,000 Accounts payable Since WCR Accounts payable = (Accounts receivable + Inventory) – Accounts payable, = (Accounts receivable + Inventory) – WCR = ($800,000 + $1,200,000) – $1,440
Words: 836 - Pages: 4
Module Code: BU7205 Module Title: Managing Human Capital Level: 7 (MBA 2) NAME: MD JAHED HOSSAN STUDENT ID: 1326892 MODULE TUTOR: David Hall/Rajendra Kumar SUBMISSION DATE 23rd JUNE 2014 Table of Contents Introduction 4 Literature Review: 5 Human Capital strategy 7 Critical analysis: 9 Conclusion 14 Recommendations 15 Reference 17 Introduction Human capital is established of awareness, proficiencies, capability
Words: 4559 - Pages: 19
