Working capital Flashcards
1
Q
What is working capital?
A
means the day to day fiance needed in a business and can be calculated by CA - CL
2
Q
What are causes of cash flow problems?
A
- low profits
- excess inventory held
- allowing customers too long to pay
- seasonal demand
3
Q
How can you improve working capital (liquidity)?
A
- reduce stock held
- reduce credit period for customers
- pay suppliers later
4
Q
How can you manage amounts owed by customers?
A
- credit control
- selling debts to debt factors
