Working capital Flashcards
1
Q
How do businesses generate cash?
A
From day to day operations (cash flow)
2
Q
What are sources of Short Term finance?
A
-short term loans
-overdrafts
-Trade Payables
-Debt Factoring
3
Q
What are capital decisions trying to maintain the balance between?
A
Profitability and liquidity
4
Q
What does profitability aim to do?
A
When it is increases, it aims to keep inventory low
5
Q
When liquidity is increased what are its aims?
A
-high levels of cash
-inventory
-recievables
-minimise risk
6
Q
What does aggresive W.C management prioritise?
A
Profitability
7
Q
What does conservative w.c management prioritise?
A
Liquidity
