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WORKING CAPITAL MANAGEMENT
What is working capital?
Working capital is the difference between current assets and current liabilities. It represents the short-term liquidity available to a firm for its day-to-day operations.
What is the Creditors Turnover Ratio used for in working capital analysis?
It measures how quickly a firm pays its suppliers.
What is the formula for Net Working Capital?
Net Working Capital = Current Assets – Current Liabilities. A positive NWC indicates the firm can meet its short-term obligations from its short-term assets.
What is the Net Working Capital Cycle?
Time taken to convert net current assets into cash.
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