Which of the following would immediately improve the working capital of a business?
(A) Increasing credit sales
(B) Using sale and lease back
(C) Preparing a cash flow statement
(D) Repaying debt to creditors more quickly - HSC - SSCE Business Studies - Question 6 - 2013 - Paper 1
Question 6
Which of the following would immediately improve the working capital of a business?
(A) Increasing credit sales
(B) Using sale and lease back
(C) Preparing a cash... show full transcript
Worked Solution & Example Answer:Which of the following would immediately improve the working capital of a business?
(A) Increasing credit sales
(B) Using sale and lease back
(C) Preparing a cash flow statement
(D) Repaying debt to creditors more quickly - HSC - SSCE Business Studies - Question 6 - 2013 - Paper 1
Step 1
Using sale and lease back
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Answer
Using sale and lease back refers to a financial transaction where a business sells an asset it owns and then leases it back from the buyer. This process provides an immediate cash inflow from the sale of the asset, thus improving the business's working capital. It allows the company to utilize the funds raised for operational needs while retaining the use of the asset.