Finance Flashcards
1
Q
What is working capital
A
It is a measure of short term liquidity and calculated as current assets less current liabilities.
Accounts receivable collections management.
Cash management.
Inventory management.
Prepaid expenses.
Accounts payable management.
2
Q
How do you calculate free cash flow?
A
Revenue Less cost Less income tax Equals operating after-tax cash flow Less investments in capital assets Less working capital Equals free cash flow
3
Q
Define value in use
A
Value of asset if used in current capacity
4
Q
Define highest and best use value
A
Value if used for a purpose that would provide its greatest value
5
Q
Define liquidation value
A
Net proceeds received for disposal of asset net disposal costs
