Working Capital Management
Inventory Management and Economic Ordering Quantity (EOQ): Inventory is current asset; inventories are purchased for sale or production for sale. Optimum level of inventory is good current asset management. 1. Types of Inventory Inventory is divided into 3 categories: Raw Materials Work in Progress (WIP) or Unfinished Goods Finished Goods 2. Associated Costs of Inventory There are 2 basic costs
Continue reading Optimum Level of Cash Management: Cash management is the business process of collecting and managing cash and using it for investing. It is a key component of ensuring a company’s financial stability and solvency. Company manages cash by making timely collections and disbursements, and investing any temporary surpluses of cash in marketable securities, so company will keep safety level in
Continue reading Short-Term and Long-Term Financing, Financing Method: Sources of finance are important for business operation. Two main types of financing business are short-term and long-term financing. Short-term financing Short-term financing is less expensive (low interest rate) for business but it is riskier than long-term financing. The advantages and disadvantages of short-term financing are as follows: Interest rates of short-term financing are
Continue reading