Working Capital - Notes - M.com
Working capital shows the efficiency of the company to cover its short-term obligations. Working capital gives information to investors about the efficiency of the operations of the business. It is very important to know that how much working capital should be financed? Concept of Working Capital In working capital, assets having life of one year and obligations relating to current year are managed in such a way that helps in running the business efficiently. In order to understand working capital, the two types of working capital are examined: Ø Gross working capital (G.W.C) In G.W.C, the company is interested in making investments only in those assets having life of one year. Assets having life of one year are those that are to be considered as CA (Current Assets) which are used by the business in meeting operating expenses or in meeting current obligations. It includes cash, debtors (account receivables), bills receivables and st...